executive committee in nonprofits

Role of the Executive Committee in Nonprofits

The management of nonprofit organizations is a separate branch of management, which implies a special approach. In this article, we will consider the peculiarities of its corporate structure, and the role of the executive committee in nonprofits.

The corporate structure of a nonprofit organization

The basic principles of functioning of nonprofit organizations are the legal conditions of the welfare state, social justice, individual and corporate social responsibility. These organizations are based on private ownership and act in the public interest, upholding public values and the principle of pluralism in society.

In modern society, they take on functions that were traditionally performed by the state. Their special functional purpose in a market economy, the specifics of the use of their profits make it possible. In general, nonprofit organizations express not only personal interests but also the interests of society in general, meeting the need for public goods. Non-governmental non-profit organizations in their activities are focused on solving socially significant problems.

Non-governmental nonprofit organizations work closely, on the one hand, with the state and municipal sectors, participating in their programs and activities, and on the other – with the market sector, which in some cases sponsors, patrons, philanthropists, donors. At the same time, market commercial structures are very interested in the activities of such non-governmental non-profit organizations as stock exchanges, chambers of commerce, unions, and associations of entrepreneurs who defend their professional interests, provide certain services, although sometimes become competitors.

What is an executive committee of the board?

The corporate structure of a nonprofit organization in most cases is carried out according to a scheme similar to management in commercial organizations. Non-commercial organizations also have

  • a supreme governing body
  • an executive body.

The executive committee of a nonprofit organization carries out the current management of the activities of the nonprofit organization and is accountable to the supreme one. It can be both collegial and sole.

The structure of the executive body and the number of its members are determined by the supreme governing body. The tasks of the executive body are established in the constituent documents. It cannot include issues constituting the exclusive competence of other governing bodies and, in particular, the supreme governing body. Therefore, the charter of a nonprofit organization should reflect issues related to the jurisdiction of the executive body. At the same time, the range of these issues should be such that the goals for which a non-profit organization is being created are fully achieved.

The functions of the executive body of a non-profit organization comprise the resolution of all issues that do not constitute the exclusive competence of other governing bodies of the non-profit organization, as defined by applicable law and the constituent documents of the non-profit organization.

It is easy to see that the highest governing body of a non-profit organization and its executive bodies deal with fewer issues than the same bodies of a commercial organization. This is primarily due to two reasons:

  • First, the composition and complexity of the tasks performed by non-profit organizations are significantly inferior to the composition and complexity of the tasks facing the organization created for the systematic receipt and distribution of profits.
  • Secondly, the decisions made by the governing bodies of a non-profit organization can have little effect on the level of the personal well-being of its members or members. All their decisions should be aimed at achieving the goals set for the non-profit organization at the time of its creation.