The Executive Committee Explained: Key Functions and Duties

Most businesses of any size are run day to day by an executive committee — often shortened to ExCo, and sometimes called the executive leadership team or management committee. It is the group of senior executives, led by the chief executive, who turn the board’s strategy into decisions, budgets and delivery. Yet it is one of the least clearly defined bodies in corporate life. Unlike the board, it has no statutory standing of its own; unlike the audit or remuneration committee, its make-up is not set by a governance code. What it does, and how much authority it holds, depends almost entirely on what the board decides to give it.

This guide explains what an executive committee is, how it differs from the board and from board committees, who normally sits on it, what its terms of reference should cover, its typical functions and duties, and how decision-making and minutes should work. It also covers the additional expectations on executive committees in FCA-regulated firms under the Senior Managers and Certification Regime, the failures that come up most often, and why the quality of the committee comes down, in the end, to the quality of the people appointed to it.

What an executive committee is — and what it is not

An executive committee is a management body. Its members are executives, it is normally chaired by the CEO, and it exists to run the business within the strategy, risk appetite and budget the board has approved. The board, by contrast, is the governing body of the company. Under the Companies Act 2006 the directors owe the company the general duties set out in sections 171 to 177 — to act within their powers, to promote the success of the company, to exercise independent judgment and reasonable care, skill and diligence, and to avoid conflicts of interest, among others. Those duties sit with the directors, collectively and individually. They do not transfer to an executive committee simply because the committee makes most of the day-to-day decisions.

That distinction matters in practice. The board sets direction, approves strategy, monitors performance and holds management to account. The executive committee proposes, implements and reports. When the two become blurred — a board that tries to manage, or an ExCo that behaves as though it is the board — accountability suffers on both sides.

The executive committee is also different from a board committee. Audit, remuneration, nomination and (in many financial services firms) risk committees are committees of the board, made up largely or wholly of non-executive directors, with terms of reference set by the board. The executive committee is a committee of management. Some companies do constitute their ExCo formally as a committee of the board, with the executive directors as members and others attending; many more treat it as the CEO’s leadership forum, operating under authority the board has delegated to the CEO. Both models work, provided everyone knows which one is in place. For a wider view of how these roles fit together, see our guide to board positions and responsibilities.

Who sits on the executive committee

Composition varies with size, sector and stage, but the core is consistent. The CEO chairs the committee and carries ultimate executive responsibility for its decisions. Around the CEO sit the leaders of the major functions:

• Chief Financial Officer — financial planning, reporting, capital allocation, treasury and, often, investor relations.
• Chief Operating Officer — operational delivery, supply chain, service and the execution of change programmes.
• Commercial or revenue leadership — sales, marketing, pricing and customer strategy.
• People — the CHRO or HR director, responsible for organisation design, talent, reward and culture.
• Technology — the CTO, CIO or chief digital officer, depending on how central technology is to the model.
• Legal, risk and compliance — general counsel, and in regulated firms the chief risk officer and head of compliance.
• Divisional or country heads — in groups with distinct business units.

The company secretary usually attends as secretary to the committee rather than as a member. A useful test is whether every member owns a significant part of the business and can commit their function to a decision in the room. An ExCo that grows past ten or twelve people tends to become a briefing session rather than a decision-making body, and real decisions migrate to a smaller informal group. How the three central roles divide the work is set out in our guide to the CEO, CFO and COO and how they differ.

Terms of reference

Every executive committee should have written terms of reference, approved by the board and reviewed at least annually. The Chartered Governance Institute (formerly ICSA) publishes model terms of reference for board committees, and the same discipline applies to ExCo. Good terms of reference cover:

• Purpose — what the committee exists to do, in a few sentences.
• Membership and attendance — named roles, the chair, the secretary, and who may attend by invitation.
• Quorum — the minimum attendance needed for a decision to be valid, usually including the CEO or CFO.
• Delegated authority — what the committee may decide, with financial and other limits, and what must go to the board.
• Frequency of meetings — commonly weekly or fortnightly, with longer strategy sessions through the year.
• Reporting — how and when the committee reports to the board and which matters are escalated.
• Sub-committees — any management committees beneath ExCo, such as an investment, pricing or risk committee, and their own limits.
• Review — how the committee evaluates its own effectiveness.

Terms of reference that sit in a drawer are worse than useless, because they give a false sense of control. They should match how the committee actually works and be updated when it changes.

Typical functions and duties

Within the authority delegated to it, the executive committee usually carries six broad responsibilities.

Turning strategy into a plan

The board approves strategy; the executive committee usually drafts it and then owns its delivery. That means translating strategic objectives into an operating plan, sequencing initiatives, allocating people and capital between them, and deciding what the business will stop doing. A committee that only tracks progress against someone else’s plan is not doing its main job.

Budgets and financial management

ExCo prepares the annual budget and forecasts for board approval, then manages performance against them: approving expenditure within its limits, reallocating resources as conditions change, and agreeing corrective action when results drift. The CFO leads this work, but the whole committee should own the numbers rather than treating finance as the CFO’s problem.

Policy and operating standards

Many group policies — on delegated authorities, procurement, people, information security, health and safety — are owned by the executive and approved by ExCo, with the most significant reserved for the board. The committee is responsible for making sure policies are applied in practice, not just written.

Performance monitoring

A well-run ExCo looks at a consistent set of operational, financial, customer and people measures, at the same rhythm, so that trends are visible. It holds its own members to account for their functions, which requires a degree of candour that weaker committees avoid.

Risk and incident management

The executive owns the management of risk within the appetite the board has set. ExCo reviews the risk register, decides on mitigations and is usually the body that leads the response to a serious incident — a cyber attack, a major customer failure, a regulatory issue — while keeping the board informed. Clear escalation thresholds, agreed in advance, stop the committee either over-reacting or keeping the board in the dark.

Communication and culture

The executive committee is the most visible expression of how the business is led. Its members carry decisions to their teams, and the way they behave towards one another sets the tone below them. Consistency of message across the committee matters as much as the content of any single announcement.

Delegated authority: how ExCo gets its power

An executive committee has only the authority the board gives it. For most private companies the starting point is the articles. Article 5 of the model articles for private companies limited by shares allows the directors to delegate any of their powers to a person or committee, to the extent and on the terms they think fit, and article 6 requires committees to follow procedures based on the articles governing directors’ decision-making. Companies with bespoke articles should check what theirs say.

In practice, delegation is recorded in two documents. The schedule of matters reserved for the board lists what only the board can decide — typically strategy, annual budgets, major acquisitions and disposals, significant borrowing, dividends, senior appointments, and approval of the accounts. The delegated authorities framework sets out who below the board can approve what, usually with financial limits by role. The executive committee sits between the two. The board should be able to look at these documents and see exactly which decisions ExCo can take without coming back to it.

Delegation does not remove responsibility. Directors remain accountable for how delegated powers are used, which is why the board needs good reporting from ExCo and why the executive directors on the board act as an important link between the two bodies.

Decision-making and minutes

Executive committees often run on discussion rather than formal resolutions, which is fine until something goes wrong and nobody can show what was decided, by whom, and on what information. Good practice is straightforward:

• Papers go out in advance, with a clear statement of what the committee is being asked to decide or note.
• Decisions are recorded as decisions, with the rationale and any dissent, not just as a summary of discussion.
• Actions are logged with an owner and a date, and reviewed at the next meeting.
• Conflicts of interest are declared and recorded, and the conflicted member steps out of the decision where appropriate.
• Matters outside ExCo’s authority are clearly flagged for escalation to the board.

Minutes should be accurate and concise. In regulated firms they are often the first thing a supervisor asks to see when testing whether senior managers took reasonable steps, so they need to show that challenge happened, not just that a meeting took place.

How ExCo relates to the board committees

The executive committee and the board committees have different jobs, but they rely on each other.

• Audit committee — oversees financial reporting, internal control and the external and internal audit relationships. The CFO and finance team prepare the material; ExCo owns the control environment the audit committee is testing.
• Risk committee — where one exists, oversees the risk framework and appetite. The executive manages risk day to day and reports through the chief risk officer.
• Remuneration committee — sets pay for the executive directors and usually reviews pay for the wider senior team. ExCo members are subject to its decisions, so they should not be setting their own terms.
• Nomination committee — leads board appointments and oversees succession planning for the board and senior management, which brings ExCo membership directly into its scope.

For listed companies, the FRC’s UK Corporate Governance Code 2024 sets expectations for these board committees on a comply-or-explain basis. The 2024 Code has applied to financial years beginning on or after 1 January 2025, and Provision 29 — the board’s declaration on the effectiveness of material internal controls — applies to financial years beginning on or after 1 January 2026. That declaration depends heavily on the executive: it is management that designs and operates the controls, and ExCo that has to give the board the assurance it needs to sign. The FRC’s Corporate Governance Code Guidance is a useful reference on the division of responsibilities between board and management, even for companies the Code does not cover.

The executive committee in FCA-regulated firms

In financial services, the executive committee is where much of the Senior Managers and Certification Regime is lived day to day. Most ExCo members in a regulated firm hold Senior Management Functions, and each senior manager has a statement of responsibilities setting out what they are personally accountable for. Under the duty of responsibility, a senior manager can be held accountable for a breach in their area if they did not take reasonable steps to prevent it — and being one voice in a collective committee decision is not, on its own, a defence.

For Enhanced firms, the regime also requires a management responsibilities map: a single document showing how responsibilities are allocated across the firm, how its governance and reporting lines work, and how the committees fit together. The executive committee and its sub-committees are central to that map. Supervisors expect the map, the statements of responsibilities and the ExCo terms of reference to tell the same story; gaps or overlaps between them are a common finding.

The regime is being reformed. The FCA’s PS26/6 policy statement set out Phase 1 changes, most of which took effect on 24 April 2026, including measures to reduce the burden around responsibilities maps and statements of responsibilities and changes to the thresholds for Enhanced firms. The FCA has said it expects to consult on a broader second phase if the Treasury’s proposed legislative changes go ahead. Firms should check the current rules rather than relying on older guidance, and dual-regulated firms need to read the PRA’s parallel changes too. The underlying principle has not changed: individual senior managers remain accountable for their areas, and the executive committee does not dilute that accountability.

Common failures

Executive committees rarely fail because of their structure. They fail because of how they behave. The patterns that come up most often:

• Status updates instead of decisions — meetings consumed by functional reports, with the hard trade-offs deferred or taken outside the room.
• Unclear authority — nobody is sure what ExCo can decide without the board, so decisions are either escalated unnecessarily or taken without proper sanction.
• A dominant chair — a CEO who decides alone and uses the committee to announce, which removes challenge and leaves the rest of the team disengaged.
• Functional silos — members who defend their own area rather than acting as a leadership team for the whole business.
• Poor information — late, inconsistent or unreconciled papers, so the committee spends its time arguing about the numbers.
• Weak records — minutes that do not show what was decided or why, which becomes a serious problem in a dispute or regulatory review.
• The wrong mix of people — gaps in capability, or a committee assembled for a previous stage of the business that has not been refreshed as the strategy changed.

Most of these can be addressed through better process: clearer terms of reference, a disciplined agenda, a regular effectiveness review. The last one cannot.

Building the right executive committee through hiring

The single biggest influence on how an executive committee performs is who sits on it. Each appointment changes the dynamics of the whole group, so senior hires should be assessed not only for their functional skills but for how they will operate as part of a collective leadership team: willingness to challenge peers, ability to take a whole-business view, and comfort with shared accountability.

That starts with the CEO. A strong CEO appointment sets the tone for how the committee works, how open the debate is and how decisions are made. The CFO is usually the second anchor; a CFO search for a business with an established ExCo should test how the candidate will hold colleagues to account on financial performance without becoming the committee’s only source of discipline. The COO role is frequently where a committee is strongest or weakest on execution.

When we run an executive search for an ExCo seat, we look at the existing committee as well as the role: where the gaps in capability are, what the business needs over the next three to five years, and what kind of person would make the group better rather than simply fill a vacancy. Our guide to hiring C-suite executives in the UK covers the process in more detail.

Two further points are worth making. First, an executive committee does not always need every seat filled permanently. Interim leaders can cover a gap or lead a defined programme, and fractional executives can give a growing business senior capability before it can justify a full-time role. Second, the executive committee and the board should be considered together. Changes at ExCo level often expose gaps on the board, and the reverse is also true; our board of directors recruitment work regularly runs alongside executive-level search for exactly that reason.

Frequently asked questions

Is the executive committee the same as the board?

No. The board is the governing body of the company and its directors owe statutory duties under the Companies Act 2006. The executive committee is a management body, normally chaired by the CEO, that runs the business within the authority the board delegates to it.

Who chairs the executive committee?

Usually the chief executive. In some groups an executive chair or a managing director chairs it, but the principle is that the most senior executive leads the committee and carries ultimate executive responsibility for its decisions.

Does an executive committee need terms of reference?

There is no general legal requirement, but it is good practice for every ExCo to have board-approved terms of reference covering purpose, membership, quorum, delegated authority, meeting frequency and reporting. In regulated firms, supervisors expect them to align with the firm’s responsibilities map and statements of responsibilities.

Can non-executive directors sit on the executive committee?

Normally not. Non-executives provide independent oversight and challenge from the board, and sitting on ExCo would compromise that independence. They may occasionally attend for a specific item, but membership is for executives.

How often should the executive committee meet?

Most meet weekly or fortnightly for operational business, with a small number of longer sessions each year focused on strategy, budgets and the committee’s own effectiveness. The right rhythm depends on the pace of the business.