The executive committee is the subcommittee of the board of directors. It is an organ that governs the company, oversees the management, establishes strategy and oversees its members. Members are elected by members or shareholders. They meet regularly to examine the financial performance of the business and to set policies, as well as appoint senior management. It is also the governing body responsible for ensuring the compliance of good governance policies.
Executive committees, unlike the full board are smaller groups that are closely connected to their leaders. They are able to meet quickly and with short notice to discuss important issues, such as urgent workplace issues, high-level strategic decisions, or organizational supervision. They’re usually accountable for ensuring that board members are aware of their roles and responsibilities and also are the ones who lead in providing effective governance practices training. They may also be responsible for choosing a new CEO or conducting CEO performance reviews and reporting to the board.
The executive committee serves as the steering wheel of the board, focusing on issues the board must address. It is essential to ensure that the executive committee is completely 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 be a permanent committee of board with a fixed term and formal terms. This allows the board to see which issues have been handled by the executive committee and which still require the attention of the entire board.
