Executive Committee Vs Board of Directors

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The board of directors is a corporate’s top governing body. The board is accountable for the company’s goals as well as the decision-making processes. The board of directors consists of senior leaders who are elected or appointed by members. The company’s constitution, bylaws and regulations from the government regulate the board of directors’ powers and duties.

An executive committee is a smaller group that has close ties to the management and can meet on short notice and discuss urgent issues that affect the company and then bring them to the full board’s attention. The executive committee could have the same responsibilities as the board, contingent on the organizational structure of the company as well as its bylaws.

Typically, the executive committee consists of the chairperson, vice-chairperson, and treasurer of the board. The chairperson also acts as the spokesperson for the business and ensures that all board and committee activities are in line with its mission. The executive committee can also be a good option when the company needs to swiftly tackle repetitive matters or controversial ideas, since this group is able to examine and approve questions prior to bringing them up to the board in its entirety.

However, it’s essential to make sure the committee isn’t able to take on the power to make decisions that, according to bylaws properly belongs with the board in its entirety. An executive committee should have a clear chart of its purpose, a clear procedure to delegate authority and an internal set of checks and balances.

Written by Roberto Contreras