February 19, 2019

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Rose Mercier

Executive Sessions – Why, When and How

Early in my professional career, I worked in a nonprofit organization. I knew relatively little about board roles or governance processes – no one was even actually talking about ‘governance’ back then. I did observe that, quite apart from the need to prepare seemingly endless reams of material and reports, upcoming board meetings instilled a level of anxiety among staff. And, if the board decided to have staff leave the room and go “in camera”…well, that could only mean one thing: the board was getting ready, at best, to talk about staff decisions it didn’t like, and, at worst, to fire someone, likely the CEO. I have seen or heard about the latter happening more than once in the first decade of my career.

Since that time, I have learned much about boards and how they can govern effectively including how to make appropriate use of the in-camera meeting or executive session as it is more often called today.

Most boards that I work with make use of executive sessions, but they do so in a transparent and deliberate manner. Staff do not run red flags up the pole when they see an executive session scheduled in the board’s agenda. So, how can a board use executive sessions effectively? If you are a regular reader of our blog, you will not be surprised to read that a board should document its agreement about why, when and how it will use executive sessions in policy. What would such a policy address?

The highest level policy statement might say something like, “The board recognizes situations arise where sensitive and confidential matters require private deliberation. These items may be considered in Executive Sessions.” This statement answers the question of why a board would use executive sessions. Remember that policies express a board’s values about its own processes. A board with such a policy values confidentiality as a means of protecting individuals and the organization when sensitive matters should not discussed with staff present or in public. It wants to give its full consideration to matters in an appropriate context.

In further levels of policy detail, the board would answer questions about when and how it will use executive sessions and perhaps why it prefers some actions over others. Following are some of the questions that a board needs to address in its policy:

  • Besides the board, who else might be part of an executive session and when will that be the case? Will the CEO be included or excluded from a board’s executive session? The CEO is often present in an executive session unless the board is discussing the CEO’s contract, performance, conduct, or legal issues involving the CEO. When would the CEO be excluded? When and how will the CEO be informed of the exclusion? The answer to this situation should be stated in the board’s policy. 
  • When will the board use executive sessions? Will they be a standing part of the agenda or be used only on an ad hoc basis? Who has the authority to ask for an executive session? Who has the authority to determine when the board will move into an executive session? The board wants to answer these questions to prevent inappropriate or overly zealous use of executive sessions.
  • A board should identify items that automatically trigger an executive session. Typical circumstances include advice of legal counsel, discussion of a pending legal matter, or consultation with auditors or compensation consultants. Other possibilities might be mergers, land purchase, relocation, CEO retirement or succession planning. Most of these are situations where the CEO is normally included with the board. A board should also decide when and if anyone else can be included, e.g. legal counsel, auditor, etc. Sometimes legislation, regulations or bylaws require a board to meet in public or open session; normally there is provision for when a board may meet in-camera. It is important to know if this is the case for your board.
  • If the board values trusting and honest relationships among peers, it may decide it wants regular executive sessions as the opportunity for frank and open exchange, to  debrief group dynamics, or even just to check in with each other. If this is the case, a board might regularly schedule an executive session at the end of each meeting or at pre-determined intervals.
  • Finally, there is the question of the treatment of materials and records. Given that executive sessions are used in situations which require sensitivity and confidentiality, a policy should state the board’s agreement about required material. Will it be distributed at the start of the meeting and collected at the end? Or, what measures will the board exercise to ensure an appropriate level of security for documents that are needed in the executive session?
  • An important consideration is how or even if there is a record kept of an executive session. There is a range of possibilities, as well as legal requirements that a board needs to consider about executive session records or notes. It is wise to consult legal counsel before deciding on the process you will record in your policy. Where there is no legal requirement, legal counsel may advise on situations where notes are advisable or where notes are not required or desirable. If there is a record of the session, a board needs to record in its policy the processes it will use to maintain the security of such notes. Many of these decisions will benefit from informed and expert counsel.
  • Regular board minutes will indicate when the board went into executive session and when it reconvened the regular board meeting. A board policy needs to state how motions arising out of an executive session will be made and recorded. What steps will the board take to ensure that no confidential information is inadvertently recorded or improperly stored?

There is a lot to consider about the why, what and how of executive sessions. However, having a soundly researched and well-considered policy will enable a board to effectively use this governance option. And if the policy is written down, it is unlikely that staff will need to stock red flags.

If your board is looking for help to develop a Governance Process policy on executive sessions or simply to review your current policy, get in touch. Our consulting team would be pleased to offer support.

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