Executive Committee Vs Board of Directors
The board of directors is the most powerful the governing body of a business. The board is accountable for the company’s goals as well as the decision-making processes. The board of directors is made up of senior leaders who are appointed or elected by members. The corporation’s constitution, bylaws and regulations from the government regulate the director’s powers and duties.
An executive committee is a smaller group that has close ties through the leadership and who can meet on short notice to discuss urgent issues that affect the organization and then bring them to the board’s attention. Based on the structure of the company and bylaws the executive committee could have the same responsibilities as the board of directors. Or it may have a limited role.
Typically, the executive committee is made up of the chairperson, vice-chairperson, and treasurer of the board. The chairperson also acts as the spokesperson for the organization and ensures that all committee and board activities are in line with the mission. The executive committee may be a great option when the company is seeking to address issues that are repetitive or ideas that are controversial. This group could be utilized to approve and vet these issues prior to them being presented to the board in its entirety.
However, it’s important to make sure the committee isn’t able to take on decision-making authority that under the bylaws properly belongs with the full board. Executive committees should have clearly defined charter, a clear process for delegating authority and an internal set of checks and balances.