An executive board is a subset of the board of directors who oversee activities related to strategic planning and decision-making.
A board of directors helps provide strategic oversight to an organization, and often divides itself into several committees or sub-boards to divide duties based on expertise.
This could include a marketing board, finance board, or executive board. The executive board, in particular, acts on the board’s behalf if the entire board of directors can’t convene in time to make a crucial decision. Read on to learn more about an executive board’s roles and responsibilities.
What is An Executive Board?
Also known as an executive committee or a governing board for business entities, an executive board is a subcommittee within the board of directors that oversees the organization’s strategic planning and decision-making activities. They serve as a steering committee when decisions need to be made quickly, but answer to and report back to the full board of directors.
The board consists of a small number of people selected for their excellent track records in leadership and management, governed by the corporate bylaws. Members of the executive board are usually from the company’s employees and management or a team of representatives from a worker’s group or union appointed by the company executive.
In addition to having an executive board that’s directly related to the company, the board should have a team of independent directors to ensure good governance and accountability. Independent directors have no relation to the company, making their role vital, as they are the company’s watchdogs.
Executive Board Roles and Responsibilities
Generally, an executive committee oversees strategic planning and business activities and makes decisions in the organization. However, the specific responsibilities differ as they are detailed by the organization’s corporate laws.
The most common responsibilities include:
1. Provide Strategic Direction
Strategic direction is essential for a company to experience growth, as it helps determine its objectives and plans to achieve its goals. The executive committee usually develops and ensures the implementation of strategic plans.
The strategic direction may be in the form of analyzing or creating:
- An ideology that will be the company’s core belief to define the company’s purpose
- Principles that guide the work ethic of all team members in the organization to ensure uniformity and standardization
- Vision to help modify business plans and strategies to achieve the desired outcome
- A long-term business strategy to help stay on track, including using board management capabilities to achieve more and reduce complexity
2. Support Business Goals and Objectives
An executive committee ensures business strategies and plans are implemented and followed. A business will achieve its primary goals and objectives through good governance and progress evaluation completed by the executive board.
Executive committees conduct thorough research on new strategies and investments to mitigate risks and unseen competition. The executive board makes sound decisions to support upcoming goals and objectives.
3. Manage Budgets
Budgeting is the foundation of any business’s success, as it ensures the organization has enough financial resources to meet its goals. A financial plan created by the executive board should be given to all departments that directly work with finances, including the accounting office and marketing board.
Forward communication with other departments ensures transparency and honesty, helping the business have an updated record of the cash flow for better planning and budgeting.
4. Oversee Personnel
Each business has its designated chain of command, with the executive board being the bridge between the management and the board of directors. The executive committee oversees activities, such as human resource and regulation, security guidelines, and quality management.
Board Management Software and Executive Board Effectiveness
Working with a dedicated board management software like OnBoard ensures board meetings held by the executive committee are effective, smooth, and uncomplicated. With Zoom integration and secure messenger, OnBoard encourages communication and collaboration between board members, increasing work productivity.
The shared space provided by the management software allows board members to have a common platform for sharing and storing information needed for the business’s good governance.
Meeting analytics and task management help boards host more effective, action-driven meetings, and ensure follow-up. Get a free board meeting agenda template to help create a goal-focused agenda for your business.
Frequently Asked Questions
What Type of Work Does the Executive Board Do?
The executive board members oversee budgeting, as they have direct access to the expenditure and revenue reports. As a result, they can make suggestions and tweaks to help the organization reach its financial goal.
In addition, it facilitates decision-making in critical circumstances and between board meetings, as it can act on behalf of the full board.
What Constitutes an Executive Board?
The executive board consists of:
- Chairperson, who ensures all board activities align with the company's objectives
- Vice-chairperson, who assists the chairperson, and can stand in their position during their absence
- Secretary to maintain meeting documentation
- Treasurer to oversee the finances
What is the Difference Between a Board of Directors and an Executive Board?
The executive board and board of directors share some members and responsibilities, but the two are different entities. The board of directors governs the organization, creates the company's policies, and has meetings up to four times a year. In addition, the board of directors is in charge of electing the executive committee.
The executive board is an extension of the board of directors, acting as their eyes and ears when the board can't meet. They consist of three to seven members responsible for making decisions between board meetings, resolving urgent matters, and being accountable to the board of directors.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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