It’s not uncommon for the board of a nonprofit to empower an executive committee to act on the board’s behalf during times when the board is out of session. Especially when the full board cannot be convened expeditiously, boards may find an executive committee to be an attractive alternative. On the other hand, some boards form an executive committee because they simply perceive that other nonprofits have one.
It is in the nature of an executive committee to have authority over all other committees in an organization—and along with that authority comes certain particular responsibilities. Often it has the capacity to act on behalf of the full board. In ideal circumstances this capacity is utilized to ease the act of decision making in the interim between board meetings, or during crises or other circumstances that qualify as urgent.
Sometimes a nonprofit permits an executive committee’s authority to outstrip its intended purpose, however. The board of directors is still the highest authority in the nonprofit’s hierarchy, and executive committees should not be used to get around the full responsibilities of that decision-making body. Among the powers that should not be delegated away from the board are such actions as: the approval or alteration of the organization’s budget; hiring or firing of the organization’s chief executive officer; the election or removal of board officers; the making of structural decisions of major import; or the amendment of organizational bylaws.
Often, particularly when an organization’s board already comprises a limited number of individuals, there is in fact no need at all for an executive committee.
When an executive committee is formed, it is essential that the organization maintains the committee’s accountability to the full board at all times.
Provident Law’s church and nonprofit attorneys are here to answer questions and to aid in establishing and crafting policies governing nonprofit governance. We recognize how essential the missions of nonprofit and religious organizations are for society, and we stand ready to counsel and serve the churches and nonprofit organizations of Arizona. Contact us to learn more.