A board of directors is in charge of strategic planning and taking decisions for their organization based on their goals as well as their values and vision. They can do this because they are individuals elected by shareholders to control the company’s assets.
Boards are extremely busy and can’t always meet to discuss all the important issues facing a non-profit particularly in times of emergency. A lot of boards form an executive committee to address these issues. An executive committee consists of a group that has strong leadership ties that can be assembled quickly to discuss important issues that affect the board.
The executive committee is a consultative group to the board. They usually meet more frequently and move faster, and are able to tap into research results to offer recommendations to the board. This allows the board’s focus to be on issues of higher importance and delegate lower-level concerns to the committee.
The executive committee can often take on the role of being a leader in developing the board by offering training, mentoring and conducting self-evaluations every year. This allows for streamlined things that the board is required to do and keeps everyone on the same page in terms of aligning and making why not try here decisions.
It is essential that both the executive committee and the board of directors are aware that they are accountable to the board. They will be required to provide regular meeting notes, documentation and a report on votes. In common law jurisdictions, directors are considered to be agents of the company and their actions have a binding effect on the company. This principle was confirmed by the House of Lords in the 1909 case Turquand’s v Salmon and is still widely accepted.