Executive board: The who, what, & why of corporate executive boards
If the board of directors is the compass, the executive board is the steering wheel. Acting as a subcommittee of the larger board, the executive board actively guides and manages the day-to-day operations, making quick decisions and adjustments to keep the organization on the road.
But that doesn’t mean the executive board forges ahead without oversight. Here, we’ll explain:
- What an executive board is
- The executive board vs. the board of directors
- Who makes up the executive board, and which positions they hold
- The critical responsibilities of the executive boards
- How to appoint and evaluate executive board members
- How technology streamlines communication between the executive board and the board of directors
What is an executive board?
An executive board — or executive committee – is a subset of the larger board of directors tasked with handling key decision-making responsibilities and overseeing the organization’s day-to-day operations. The executive board implements the long-term policies and governance set forth by the entire board, supporting the organization to stay on track with its goals.
Executive board vs. board of directors
Both the executive board and board of directors have key leadership roles, but they differ in a few critical ways:
- Role: Executive boards oversee day-to-day operations and make urgent decisions, while the board of directors sets the longer-term strategy.
- Authority: The board of directors holds the organization’s ultimate corporate governance authority but empowers the executive board to act on its behalf between meetings.
- Members: An executive board typically includes the chair, vice chair, treasurer and secretary, while the board of directors will comprise a much broader group, often with committee chairs and independent directors.
- Focus: Executive boards have an eye on tactics, operations and immediate decisions, keeping the board of directors focused on strategy and high-level governance oversight.
- Meeting frequency: Board directors meet quarterly or annually, but executive boards will meet more frequently, as needed.
Who makes up the executive board?
The executive board typically includes senior board members who have been given the authority to act on behalf of the board between regular meetings. These board members fulfill the following roles.
Executive board positions
- Chairperson: The executive board chair leads the board, sets meeting agendas and ensures the organization follows its mission and strategy.
- Vice chair: The vice chair supports the chairperson and often steps in when the chair is unavailable. They may also take the lead for specific initiatives.
- Secretary: Like the board of directors, the executive board secretary maintains records, meeting minutes and official documentation. These activities are essential for legal and regulatory compliance and holding the executive board accountable.
- Treasurer: This member manages finances and budgets. They also report back to the executive board on the organization’s financial health so they can make sound decisions about its finances.
- CEO (if applicable): Some executive boards will appoint the CEO as a non-voting member. They are responsible for executing board decisions and managing daily operations.
What does the executive board do? 6 critical responsibilities
Keeping the organization running smoothly and aligning with the board’s strategic plan may sound daunting. But the reality is that executive boards are structured to do just that. An effective executive board will be responsible for:
- Implementing board policies and strategies: The executive board supports the organization in following the board of directors’ vision, mission and policies. The executive board may set shorter-term goals that align with the strategic plan, oversee critical initiatives or encourage compliance with regulations.
- Overseeing day-to-day operations: While the executive board doesn’t do daily tasks like staff members, it oversees operations to promote efficiency. Board members may review program effectiveness, address operational challenges or verify resource allocations.
- Managing financial oversight: The organization’s financial health often rests on the executive board’s shoulders. Together, the treasurer and executive board members review and approve budgets, monitor cash flow and expenses, assess funding strategies and revenue streams and bolster compliance with financial regulations.
- Making urgent decisions: Boards of directors often meet on a set schedule (e.g., bi-monthly or quarterly), but urgent matters — legal issues, financial crises, leadership changes and more — can’t wait. The executive board can make critical decisions between meetings to advance the organization.
- Evaluating organizational performance: The executive board tracks progress and measures the organization’s success by reviewing key performance indicators (KPIs), assessing the effectiveness of programs and initiatives and identifying areas for improvement. The executive board may also identify and implement necessary improvements based on that data.
- Supporting the CEO: If the CEO needs guidance, mentorship or accountability, the executive board steps in. This can include setting performance expectations, conducting regular evaluations or ensuring the leader has the resources to succeed.
How to appoint members to the executive board
Appointing the right individuals to the executive board is essential for strong leadership and effective decision-making. The process typically follows these seven steps:
- Define roles and responsibilities: Outline the executive board positions and the expectations for each. This helps candidates understand their full responsibilities before being considered.
- Establish eligibility criteria: Determine the qualifications you need in executive board members. Consider skills already present among executive board members and gaps you must fill. This could include leadership experience, industry knowledge or expertise, commitment to the organization’s mission or financial or governance experience, particularly for treasurer roles.
- Nominate candidates: Board members, stakeholders or the nominating and governance committee identify and propose candidates based on the criteria. In some cases, this may involve an application process to encourage a diverse pool of candidates.
- Evaluate candidates: Vet nominees through a formal review process. Check their resumes and qualifications, conduct interviews or informal discussions and contact references to verify past leadership experience.
- Hold a vote: The board of directors votes to appoint executive board members. Depending on the organization’s bylaws, this may require a simple majority or a two-thirds vote.
- Onboard and train new members: New executive board members should receive orientation and training covering topics they may have been less exposed to as a board of directors member, including financial reports, key policies and roles and expectations within the executive board.
- Set term limits and renewal procedures: Define term lengths and a board succession planning policy. This sets the stage for smooth transitions and fresh perspectives.
How to evaluate the executive board
Regular reviews are the key to keeping the executive board effective, accountable and aligned with the board of directors' priorities. While similar to broader board assessments, executive board evaluations can be more tactical in nature and focus on how effectively they drive organizational performance.
- Define evaluation criteria: Establish clear metrics and benchmarks to assess the executive board’s effectiveness and share them with the executive board so they understand expectations. Most boards of directors review executive board performance related to strategic leadership and decision-making, financial oversight and resource management, governance and policy adherence and more.
- Gather feedback from stakeholders: Collect input from those the executive board supports, such as the board of directors, executives, staff and others. Doing so can create a more well-rounded picture of the executive board’s impact. Anonymous board surveys can yield more honest feedback, while one-on-one interviews can feel more personal.
- Review meeting attendance and participation: Analyze attendance records, participation levels and the quality of discussions. A lack of engagement may indicate that the executive board needs new leadership.
- Assess decision-making and outcomes: Evaluate how well the executive board implements the board of directors’ strategies, responds to challenges and crises and oversees financial and operational performance. A review of past decisions can reveal success patterns or improvement areas.
- Conduct self-assessments: Ask executive board members to reflect on their performance and contributions using structured self-assessment tools. You can gather their perspective on whether they understand their responsibilities, how they contribute to discussions and decisions and whether they collaborate effectively with board members and leadership.
- Develop an improvement plan: Executive board evaluations should be actionable. Based on your findings, create a report and an action plan to fill gaps and strengthen the board’s effectiveness. You could introduce leadership training or workshops, adjust board composition or roles or set more explicit goals and measures.
Maximize performance with a compelling executive board
Behind many powerful boards of directors is an effective executive board. A well-structured executive board increases the board’s capacity for strategic decision-making and decisive operations. At the same time, executive boards don’t act alone.
Communication and collaboration between the executive board and the board of directors are critical to helping each group fulfill its role effectively. Diligent Boards, part of the Diligent One Platform, opens the lines of communication between boards of directors and their executive boards.
Explore Diligent Boards today to see how it can help you create a more connected, accountable and high-performing leadership structure where the executive board and board of directors work in sync.
FAQs
Who can attend an executive session board meeting?
An executive session is a private meeting, typically excluding non-board members, staff and sometimes the CEO. Executive board members, board of directors (if applicable) and legal counsel or auditors (as needed) are the only ones who can attend an executive session board meeting. These limitations allow for confidential discussions about personnel issues, legal matters or executive performance reviews.
Is the CEO part of the executive board?
It depends on the organization’s structure. In some cases, the CEO attends executive board meetings but doesn’t vote. In others, the CEO may be a formal, non-voting member of the executive board. The CEO will also be part of the executive board if they also serve as the board chair.
What is another term for executive board?
Other terms for executive board include executive committee, leadership council, governing board or management board.
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