What Is an Executive Board?

Jim B.

An executive board is generally a group of people that are directly involved with making most of the crucial decisions for an organization. In some cases, the board is also known as the board of directors and is elected by shareholders of a company to oversee the company's management. There may also be occasions when the executive board is comprised of hired employees of an organization and work in concert with the chief executive officer, or CEO, to run the operations. This board has a definite impact on the way that an organization runs and whether or not it is successful.

Sometimes the board of directors acts on behalf of the company's shareholders.
Sometimes the board of directors acts on behalf of the company's shareholders.

Decisions involving large amounts of money and affecting many lives are made every single day in the modern business world. These command decisions are not to be taken lightly. As such, organizations, whether they are huge moneymaking conglomerates or nonprofit fundraising groups, take great care in choosing the people who are tasked with making these decisions. In most cases, a small group of people, known as the executive board, is directly responsible for the overall direction of an organization.

Board of directors typically act on behalf of shareholders.
Board of directors typically act on behalf of shareholders.

There are generally two ways that an executive board can be formed. Sometimes this board of directors acts at the behest of the shareholders of a company. When this is the case, the board acts in a role that tends to be more oversight than hands-on operational decision-making. This board is usually in charge of hiring and firing the management of an organization, and they also meet periodically to make sure that business is being done properly.

The other way that an executive board comes to the head of an organization is by being hired. When this is the case, the board often consists of different department heads. For example, a company might have a CEO who is the ultimate decision-maker, but he or she might also be joined on the board by vice presidents of departments such as marketing, human resources, operations, security, and so forth.

No matter how an executive board is aligned, the tasks assigned to the members of the board are extremely important. As such, the members are generally highly compensated for their work, at times the highest-paid employees of an organization. They are often awarded benefits like special stock options. In return for that excessive compensation, their work often comes under intense scrutiny, not just from the people associated with their organization, but also from the public at large.

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