What is an Executive Committee?
An executive committee is an extension of the board consisting of senior leaders and executives who convene and resolve issues on behalf of the board of directors. Their primary duty is to handle urgent decisions as they come up, influencing the organization’s long-term direction.
Like all board committees, an executive committee is elected by the board and functions within clearly defined responsibilities outlined by the charter. Although they function independently, they remain accountable to the board. This means that for every vote and decision made after every meeting, proper minutes and documentation must be submitted to the board of directors.
In nonprofits, executive committees often serve an advisory role, guiding the board and leadership teams toward mission-focused objectives, particularly during funding cycles.
Who makes up an executive committee?
An executive committee comprises the following members:
- Chairperson: Often, the person in charge of spearheading board meetings and activities.
- Vice-chairperson: As the second in command, he or she assists the chair and steps in during their absence.
- Secretary: Manages documentation (minutes, action items, records) and communication.
- Treasurer: Oversees the financial commitments and responsibilities of the committee.
Roles and Responsibilities
As the core subgroup of the board, the executive committee’s duties mostly revolve around strategic execution. While it may vary by organization’s bylaws, it generally includes:
- Managing operations: Overseeing day-in and day-out operations of the business.
- Setting priorities: Identifying the highest-priority tasks and adjusting priorities as needed.
- Making timely decisions: Moving the needle on matters that need urgent attention.
- Ensuring compliance: Making sure the organization and all individuals under its authority adhere to legal and ethical standards. This may be more applicable in industries with stricter regulations, such as healthcare and finance.
- Managing crisis and mitigating risks: Responding swiftly and with sound judgment to emergencies or unforeseen events.
Salary and Other Benefits
As most executive committee members hold senior leadership positions, they are often among the highest-compensated individuals in the organization. In the U.S., the average annual pay of a chief executive officer is $725,553, depending on the location. This base salary excludes retirement plans, health insurance, or other benefits. In most cases, the executive committee also receives incentives such as performance-based bonuses and the opportunity to obtain company stock equity.
How often should the executive committee meet?
Since they are responsible for addressing urgent issues, they must meet more frequently than the board. In most cases, executive committee meetings are scheduled once or twice a month, or on an as-needed basis.
When should a board elect an executive committee?
A board should consider establishing an executive committee when it requires a smaller group to address board emergencies in between full board meetings. This is particularly beneficial when the board is large, geographically dispersed, or when urgent matters arise that necessitate swift action.