The executive committee is a subcommittee of the board of directors, an the governing body of the company that oversees management and sets the strategy. The members are elected by the members or shareholders and meet regularly to assess the financial performance of the business and establish policies, and also to appoint senior management. It is the governing body that ensures that good governance practices are adhered to.
Executive committees, unlike the full board, are smaller groups that are closely connected to their leaders. They can meet quickly and with short notice to address major issues, like urgent workplace issues, strategic decisions, as well as organisational supervision. Typically, they’re also responsible for ensuring board members understand their roles and responsibilities and are in charge of delivering effective training on governance practices. They are also accountable for appointing new CEOs, as well as conducting evaluations of their performance and reporting them to the board.
Ultimately, the executive committee serves as the steering wheel for the board giving priority www.boardroomsupply.com/how-to-run-a-board-meeting/ to issues that the board must address. It is essential, however, that the executive committee is fully open about its decisions with the rest of board and follows the full board’s policies. To accomplish this, it is suggested that the executive committee is an ongoing committee of the board with a set term of office and formal terms of reference. This will allow the entire board to discern when an issue has been dealt with by the executive committee or if it requires the attention of the entire board.