Boards- Helpful Hint #6- Executive Sessions

BoardSource has an excellent article available entitled “Executive Sessions: How to Use Them Regularly and Wisely.” The article explains:

“By the board and for the board, executive sessions enable the board to manage itself. They create an appropriate forum for board members to talk openly about topics that warrant special treatment. In effect, executive sessions are a kind of special meeting-within-a-meeting. Executive sessions may take place before, in the middle, or at the end of a regular board meeting. They are, by definition, exclusive to board members, but others, such as the chief executive or professional advisors, may be invited to join for part or all of the session.”

Some of the reasons given to convene an executive session include:

“First, the board needs time alone to strengthen relationships and communication among board members and with the chief executive. For example, board members may be reluctant to challenge the chief executive in front of staff for fear of undermining his or her authority. In other instances, board members may wish to discuss sensitive topics like succession planning, senior staff performance, or executive compensation. Likewise, the chief executive may want to discuss future retirement plans without causing consternation among staff.

Second, board members need an opportunity to get to know and trust each other, personally and collectively. They need to be able to speak freely to air concerns and explore all aspects of issues. Executive sessions afford the board an opportunity to raise warning flags, discuss time sensitive opportunities that can’t yet be made public, and allow the board to explore different courses of action. Some issues involve the board itself, such as board performance or individual member participation. Other issues might warrant further board discussion with the chief executive, such as negative community reaction to a recent decision.

Third, as a governing body, the board needs to demonstrate and exercise its independence from the chief executive. For example, a nonprofit board serves as a check-and-balance when accepting the financial audit and determining chief executive compensation. These oversight activities require the board to make decisions that are not controlled by the chief executive.

Fourth, the board has a responsibility to maintain confidentiality to protect the organization. The law allows boards to handle certain situations in a restricted setting. For example, if an organization has been sued, the board, chief executive, and legal counsel may meet in executive session to decide whether to settle the case and the terms of the settlement. Sound business sense may also require that key strategic decisions be discussed privately. For example, if an organization is considering a merger, the board, chief executive, and chief financial officer may need to consider the pros and cons before discussing alternative courses of action with various stakeholders.”

The article contains much more information about executive sessions and how to use them wisely. If you are interested in reading more, just click on the title to this post.