The executive committee is a subcommittee that sits under the board of directors. It is an organisation’s governing body, which oversees the management, decides on strategy and supervises its members. The members are elected by shareholders or members and meet regularly to review financial performance, make decisions about policies, and choose the top managers. It is also the governing body that makes sure there is the compliance of good governance policies.
As opposed to the board of directors executive committees are typically smaller groups with close ties with leadership. They can be gathered quickly and on short notice to address important issues, such as urgent workplace matters, high-level strategic decision making or oversight of the organisation. Typically, they’re also responsible for ensuring that board members are aware of their roles and responsibilities, and provide efficient training in governance practices. They could also be accountable to appoint new CEOs and conducting evaluations of the performance of CEOs and reporting the results to the board.
In the end, the executive committee serves as the board’s steering wheel, making decisions about the issues the board should be addressing. It is important, however, that the executive committee is fully transparent in its decisions to the rest of the board and adheres to the board’s policies. It is recommended that, to accomplish this, the executive committee should be a permanent committee of the board, with a fixed duration and formal terms. This will allow the entire board to discern the moment an issue has been dealt with by the executive committee, or if it requires the full board’s attention.
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