A board of directors is a group of people who supervise strategic planning and decision-making according to the company’s mission as well as its vision, mission and values. Boards are responsible to balance shareholder interests, ensure integrity, and plan for the future of an organization.
An executive committee is a subset of the board, which is responsible for urgent matters and functions as an instrument for the board. It typically consists of a chairperson, vice-chairperson, secretary and treasurer. The chairperson is the head of the committee and usually the CEO The vice-chairperson assists the chairman, serves as a replacement for them when they are not present and serves as a second-in command. The secretary keeps minutes, keeps the calendar of committee members and ensures everyone has access to important documents.
A small group is the basis of an executive committee. They are more flexible, and they can meet on short notice to take decision in an emergency. This allows the whole board to focus on larger issues during their regular meetings.
An executive committee may also handle a variety of routine issues and stand in for the organization in situations when the entire board is not required to be present, such as standard legal or financial procedures. It can also be used to review controversial ideas and determine how the organization handles them prior to present them to the board. However, the committee shouldn’t be considered a second-tier power structure, and it’s recommended to have a clear delegation of authority, as well as internal checks and checks and balances.