Dr Jouko Huju, GMBA Finland: Finding the right people for association boards is not always easy. Part 3/3 Committee structure and communication.

Part 3/3 Committee structure and communication.

In the last part of this paper I am looking into the questions of committee structure and the internal communication between the board, chairman and the CEO.

Does your board have a committee structure?

The lack of a well-functioning committee structure leads to failed performance. Although it is true that major decisions are made in board meetings, it is also true that most of the work that supports this decision-making occurs at the committee level.

Another critical element in board effectiveness is a functioning executive committee. In most organizations, the executive committee consists of four executive officers of the board: president, vice president, secretary, and treasurer. Sometimes other members of the board are included as well; for example, chairs of the standing committees or at-large members from the board may be included to assure representation of diverse viewpoints.

The executive committee plays three critical roles:

Planning the agenda of board meetings. It is the responsibility of the executive committee to meet regularly with the executive director before board meetings to develop the meetings’ agendas.

Making decisions on behalf of the full board. Between the regular meetings of the board, the executive committee can make decisions that can’t wait until the next regular board meeting or decide on matters over which the full board has delegated it authority. In both cases, the executive committee receives its authority from the full board and reports on its decisions at the subsequent meeting of the board.

Serving as a communication link with other members of the board, especially the committee chairs. In order to be effective, the board must foster communication among its members between regular meetings. The executive committee plays a vital role in ensuring that this happens by using telephone, fax, and e-mail. To facilitate its work, the executive committee should meet on a regular basis. For example, if the board holds its regular meetings on a monthly basis, the executive committee might also meet each month in between the regular board meetings.

 The co-operation between the president and the CEO is crucial

 The president and the CEO should develop an agenda for the executive committee in advance of its meetings. They should begin by identifying agenda items that the executive committee will handle. These items are then placed on the executive committee’s meeting agenda as action items. In placing such items in this category, the board president and the CEO are assuming, based on past practice as well as relevant bylaw language and board policy, that such items are appropriate for executive committee decision making. The next agenda category includes those items that would be appropriate for executive committee discussion or referral to the full board as action items or as information items. In this instance, the board president and the CEO are judging that the executive committee lacks authority to act directly. The executive committee’s discussion of such items during its meeting may lead to recommendations for future action by the board as a whole, but the executive committee will stop short of making a decision on its own.

A third category of agenda items includes those that are offered to executive committee members for their information only; these items don’t require action by either the executive committee or the board as a whole, but the board president and executive director consider the information important enough to share it with other executive committee members.

When an executive committee agenda is organized in this manner, the members will use their meeting time more effectively and efficiently, resulting in decisions on matters that are appropriate for their action. More important, the members will lay the groundwork for effective decision making by the board as a whole when they review and, if appropriate, make recommendations for action on items to be handled by the full board of directors. They will also avoid spending unnecessary time on information items that require no real discussion or deliberation.

As a result of such a meeting process, the executive committee can construct an agenda for the full board meeting that prioritizes action items. It can be seen that by taking care of its own work in an effective way, the executive committee facilitates effective decision.

The question remains: is your company or organisation ready to invest the time and resources needed for this invaluable work? In my view: you absolutely should.

< Part 2


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