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Terms of reference for the executive committee

The executive committee (or ‘ExCo’) will not usually be formally appointed by the board as it is the Chief Executive’s forum for major operational decisions. The authority of the ExCo is generally limited to that vested in its individual members where authority has been delegated by the board. However, because the business it conducts will be of importance to the group it should report back to the board. This may be by the circulation of the ExCo minutes to all directors, or by a report from the Chief Executive (oral or written), or both.

The ExCo needs to be clear about its powers and delegated authorities and about what decisions require board approval. Written terms of reference and delegated authorities are therefore essential and should be agreed by the board as a matter of good practice.

This guidance draws on the experience of company secretaries and is based on best practice as carried out in some of the UK’s largest listed companies.

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