The executive committee is a subcommittee of the board of directors, which is an organization’s governing body that oversees management and formulates the company’s strategy. The members are elected by the members or shareholders and meet regularly to examine the financial performance of the company and establish policies, and also to appoint senior management. It is the governing body which ensures that proper governance procedures are followed.
Unlike the full board of directors Executive committees are typically smaller groups with close ties to the leadership. They can meet quickly and on very short notice to deal with major issues such as urgent workplace matters, high-level strategic decision making or oversight of an organisation. Typically, they’re also responsible for ensuring board members understand their roles and responsibilities, and take the lead on delivering effective training in governance practices. They could also be accountable for appointing new CEOs, as well as conducting evaluations of CEO performance and reporting them to the board.
In the end, the executive board serves as the steering wheel of the board, focusing on issues the board should address. It is important, however, that the executive committee is transparent in its decisions to the rest of board and adheres to the board’s policies. It is recommended, to achieve this, the executive committee should be a permanent committee of the board with a fixed time and formal terms. This will allow the board to quickly see what issues have been dealt with by the executive committee and which still require the attention of the entire board.
