A board of directors is in charge of strategic planning and making decisions for their organizations in accordance with their goals, values and vision. They are able do this since they are people elected by shareholders who be the ultimate authority over the company’s assets.
However, boards are incredibly busy, and it isn’t always possible for them to meet and deal with all of the issues facing a nonprofit on a regular basis, or in an emergency. This is one reason why boards create an executive committee. An executive committee consists of a group that has strong leadership connections. They can be quickly gathered to address issues that are critical to the board.
The executive committee works as an advisory body to www.boardroomsupply.com/tips-to-organize-an-efficient-online-board-meeting/ the entire board. They meet more frequently, are more efficient and can utilize research findings to make board recommendations. This allows the board’s attention to be focused on higher-level issues and delegate lower-level concerns to the committee.
The executive committee will often take on the role of a leader in board development, by providing training, mentoring and conducting self-evaluations every year. This assists in streamlining the many things that the board is required to accomplish and ensures everyone is on the same page when it comes to alignment and decision making.
It is crucial that both the executive committee and the board of directors know that they’re accountable to the board. They will be required to submit regular meeting notes, documentation, and a record on votes. This is because, in the common law jurisdictions, directors are believed to as agents of the company and thus have a binding effect on the company through their acts. This is a principle that was reinforced by the House of Lords in the 1909 case of Turquand’s v Salmon and is widely accepted.