The board’s officials — president, vice president, treasurer, and secretary – make up the executive committee, which is one of many the board might form. Although the executive committee members are members of the board of directors, the committee varies from the board in terms of its jurisdiction and capacity to act independently.
Key differences between board of directors and executive committee
The executive committee is a subset of the board of directors, or subcommittee. The executive committee’s role is to fill the vacuum left by boards’ inability to respond rapidly to pressing situations. It serves as a steering committee, reporting on its actions and decisions to the whole board. The executive committee is the ‘nucleus’ of the board in many respects, although it does not operate independently. It is accountable to the board and each independent director, thus its proposals should be carefully considered. There are seven significant contrasts between boards and their executive committees, as listed below. The executive committee’s responsibility is to respond rapidly in the event of an emergency.
Boards and Committees
The board’s and committees’ authority and powers are detailed in the nonprofit’s organizational papers, which include its articles of incorporation and bylaws. The documents specify the number of board members that must be appointed, as well as the organization of committees and the nomination of committee heads. Standing committees, such as the finance or executive committees, may be established by boards, as well as ad hoc committees to handle specific concerns. Committees carry out the board’s work by focusing on specific concerns, allowing for more attention to be paid to vital responsibilities. In general, committees report to the complete board and may be overseen by one or more of the board leaders.
Members of the Board of Directors
The nonprofit’s activities are overseen by an independent, volunteer board of directors, which also handles its finances and chooses the chief executive officer. The nonprofit board of directors establishes policies and takes significant decisions for the organization. As the governing body, the whole board of directors is legally accountable for the nonprofit organization and its operations. Liability insurance for directors and executives is frequently provided by boards of major organizations. Nonprofit board directors attend meetings and vote to make critical decisions and carry out the board’s responsibilities.
Committee of the Executive
The executive committee also comprises committee chairs and the organization’s chief executive officer, in addition to the board’s officials. Even with its membership, the executive committee reports to the full governing body and is bound by the board’s voting authority and the terms of the organization’s charter. Some nonprofit boards delegate wide authority to executive committees to act on behalf of the board between meetings and in emergency situations. Some executive committees have direct oversight of the organization’s CEO, including decisions on remuneration and performance review.
The size of the board and the complexity of the nonprofit’s assets and activities may influence how much authority or capacity to act independently the executive committee is given. Some charities don’t provide executive committees the right to act without the whole board’s permission. Executive committees can work in the same way as regular committees, meeting separately to hammer out ideas or gather data, then reporting to the whole board for voting and decision-making. In the end, the executive committee’s responsibility is balanced against the whole board’s ability to maintain appropriate governance.