The board of directors is the most powerful governing body in a business. The board is responsible for the decisions and guides the organization toward its goals. The board of directors consists of top-level executives, which are typically appointed or elected by members. The corporation’s constitution, bylaws, and regulations of the government govern the director’s powers, duties and responsibilities.
An executive committee is a smaller, more intimate group with close ties to the management who can be gathered at short notice to discuss urgent issues that affect the company and then bring them to the board’s attention. Based on the structure of the company and bylaws, the executive committee may have the same responsibilities as the board of directors or it could be tasked with a specific set of duties.
Typically the executive committee consists of the chairperson, vice-chairperson, and treasurer of the board. The chairperson is also the spokesperson for the company and ensures that all committee and board actions are in line with its mission. The executive committee may be a great option when the organization needs to address issues that are repetitive or controversial ideas. The executive committee can be see page https://boardroomsupply.com/the-best-virtual-data-room/ utilized to approve and vet the issues before they are presented to the board in its entirety.
It is important, however, to ensure that the committee doesn’t assume decision-making responsibilities that are properly the responsibility of the board in general. An executive committee must have a clearly defined chart, a method for delegating power as well as internal checks and balances.