A board of directors is accountable for strategic planning and decision-making for their company based on their vision, goals and principles. They can do this since they are individuals elected by shareholders to control the company’s assets.

However, boards are extremely busy, and it’s always possible for them to meet and tackle all of the important issues that nonprofits face on a regular basis or in an emergency situation. This is why many boards create an executive committee. An executive committee consists of a group of people with strong leadership ties who can be assembled quickly to discuss important issues that affect the board.

The executive committee acts in a role of advisory to the board. They usually meet more frequently and move faster, and are capable of utilizing research results to make recommendations to the board. This allows the board’s attention to be on higher-level issues and delegate lower-level concerns to the committee.

The executive committee will also often assume the responsibility of being a leader in board development, by offering training, mentorship and conducting self-evaluations every year. This simplifies many of the things that the board must do and keeps everyone aligned and on the same track when it comes to the decision-making process and alignment.

It is crucial that the executive committee, as well as the board of directors recognize that they are accountable to the board and be required to present regular meeting https://boardroomsupply.com/flexibility-with-digital-data-room/ minutes, documentation and a record of 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 affirmed by the House of Lords in the 1909 Turquand’s v Salmon and is widely accepted.