The Executive Committee

Posted on Wednesday, February 12, 2014

One of the committees that almost all nonprofit organizations have is an executive committee made up of the officers of the board. But what exactly is this collection of officers supposed to do?

Who should be on the committee?

Usually the committee consists of the officers of the board (president, vice president, secretary and treasurer) along with the executive director participating without voting rights. The nonprofit laws of many states limit membership of the committee to currently serving board members.

What is the executive committee’s purpose?

Typically the executive committee is empowered to exercise the authority of the full board on decisions that must be made in between scheduled board meetings. The executive committee can also act in an emergency whenever a quick decision may need to be made, and it is not practical to call a full board meeting.

Another common duty of the executive committee is the determination of the executive director’s compensation and performance review or succession planning. Often times a closed session of the executive committee, without the presence of the executive director, is held to discuss confidential and sensitive issues such as these.

What powers do they have?

As with any other committee, the executive committee is limited in its actions and cannot take on the fundamental responsibility of the board of directors. According to the Indiana Code (IC 23-17-15 Meetings and Actions of Board of Directors), a committee of a nonprofit organization may not:

1. Authorize distributions.

2. Approve or recommend to members action required to be approved by members.

3. Fill vacancies on the board of directors or on a committee.

4. Adopt, amend, or repeal bylaws.

In order to ensure that the executive committee does not exceed its authority, the regular board meeting minutes should include when executive sessions occurred, the primary reason for the meeting and any formal decisions so that they can be approved by the full board. Minutes of the executive committee should also be taken but only shared with committee participants.

How often do they meet?

Some executive committees meet before or after regularly scheduled board meetings. Other organizations may call an executive committee meeting only under certain circumstances such as to discuss legal matters, consult with the external auditor, make a major purchase, or address personnel issues.

Posted by: Carrie Minnich, CPA

Posted in Mission Minded Nonprofits

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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