Valuable Executive Sessions
On a few occasions during a board meeting you feel that it would be better if there were no executives around to express an opinion or a point of view.
You know that expressing yourself at that point will be embarrassing for you and for the executives involved.
This is when it is most necessary to have an “executive session” during the board meeting.
An “executive session” is a misnomer. In fact, it is the time allocated during board meetings when anyone who holds an executive position in the company (including executive directors) must leave the board room for the non-executive board members to have an open and frank discussion on issues they believe should be addressed with a free and open mind, not pressured by the presence of the persons working there, who are charged with implementing the policies and decisions taken by the board.
I have always been for starting the board meeting without the presence of the Chief Executive Officer and the Chief Financial Officer. The meeting starts with all members of the board on their own, and the executives are called in soon after. This gives an opportunity for directors to feel at ease to express themselves at the start of the meeting. An “executive session” is also allocated at the end of the meeting. Ideally you allocate a few minutes for this, maximum 10 minutes. Most of the time there is nothing to say or comment about, but knowing that the time is available puts the directors’ mind at rest that they can mention anything bothering them on the CEO or CFO performance at the end of the meeting.
Valuable time in “executive session” is when non-executive directors want to exchange thoughts and get reassurances from the company’s external auditors during Audit Committee meetings or board meetings. All executives leave the board room and questions are asked – what is keeping you auditors awake at night about this company? The reply can be highly revealing.
About the author(s)
Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.