Home Insights Board vs. Executive Management team. What is the Difference ?
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Board vs. Executive Management team. What is the Difference ?

Understanding the distinct remits of a company's Board and its Executive Team is crucial for employees and executive candidates.

In the intricate ecosystem of corporate governance, understanding the difference between the functions and responsibilities of a company's Board and it’s Executive Team is essential for any employee, leader or founder.

Who’s in Charge?

At the helm of many businesses, the Board of Directors stands as the ultimate governing body, responsible for setting strategic direction, overseeing management performance, and safeguarding shareholder interests. Comprised of seasoned professionals, often with diverse expertise, the Board holds duties which are essential to ensure the company's long-term prosperity.

Key roles within the board include:

  • Chairperson: Leads Board meetings, sets agendas, and fosters collaboration among Directors.
  • Independent Directors: Bring unbiased perspectives, offering insight and oversight without being directly involved in day-to-day operations.
  • Executive Directors: Often Senior Executives within the company, bridge the gap between the Board and Management Team, providing insight across day-to-day operations.
  • Committee Members: Serve on specialised committees such as audit, compensation, and governance, delving deep into specific aspects of corporate governance.

The Executive Team comprises of high-level management specialists who are tasked with executing the Board's directives and managing the daily operations of the company. These executives are the driving force behind the company's day-to-day functions, ensuring strategic plans translate into tangible results.

Key roles within the executive team include:

  • Chief Executive Officer (CEO): The visionary leader responsible for overall corporate strategy and performance.
  • Chief Financial Officer (CFO): Oversees financial planning, reporting, and risk management, ensuring fiscal integrity.
  • Chief Operating Officer (COO): Manages daily operations, streamlining processes, and optimising efficiency.
  • Chief Marketing Officer (CMO): Spearheads marketing and digital initiatives in line with the company's strategic objectives.
  • Chief Technology Officer (CTO): Leads technological operations and innovations across the business, ensuring teams have what they need to achieve objectives.
  • Chief Product (or Merchandise) Officer: Leads the development and creation of the product the business offers, ensuring the customer demands are delivered to maximise sales and profit results.

Who Does What?

The easiest way to understand the responsibilities between the Board and Executive Team is to think about a scenario where a company plans to launch a new product or service offering:

The Board's responsibility: The Board deliberates on the strategic implications, assessing market feasibility, potential risks, and long-term profitability. They approve the investment and monitor its progress, ensuring alignment with the company's overarching goals.
The Executive Team’s responsibility: The CEO leads the initiative, collaborating with the COO and CPO to create the product, allocate resources and streamline product development processes. The CFO oversees financial aspects, ensuring the project remains within budget, while the CMO devises marketing strategies to promote the new offering. The CTO provides the latest technology to support the strategy.

Who Does the Hiring?

Recruitment decisions within a company are often collaborative efforts between existing Board members, Executive Team members, and external stakeholders.

Board appointments typically involve nominations from existing Directors, with final selections subject to shareholder approval in public companies.

Executive team appointments are typically made by the CEO and approved by the Board, considering factors like expertise, experience, and cultural fit.

The Myth About Boards

The big common misconception about Boards is that positions are purely honorary or at least mostly symbolic. This could not be further from the truth in the reality of today’s corporate landscape.

In fact, in the vast majority of cases, serving on a Board demands active engagement, critical thinking, and a commitment to corporate governance principles including the viability of the company.

Paradoxically, Executive team positions are often perceived as being solely operational, whereas the Executive team actually carry key strategic significance in driving organisational growth.

Have You Got What it Takes?

Ideal personalities and skill sets vary across Board and Executive team roles.
If you are interested in a Board career, you should possess strong leadership, integrity, and industry expertise, coupled with strategic thinking and risk management.
If an Executive role appeals to you, you will need to be agile and innovative, with an outcome and customer obsessed mindset, mixed with excellent communication and leadership skills.

What Are Your Next Steps?

If you are looking to hire Board or Executive candidates JIVARO has a wide network of candidates with the credentials to suit your business. We can streamline and speed-up the process, using our expert insights and industry networks to put you in touch with the right talent quickly.

If you are looking for a Board or Executive role to give yourself the best possible chance of your dream role strategic positioning and experience is paramount. JIVARO can assist you with Executive career coaching, networking and researching the businesses that are of interest to you. Completing the AICD Directors course will also be beneficial.

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