An executive session is a closed meeting of a company’s board that gives members a chance to discuss sensitive topics openly. It is a meeting within a meeting, where minutes are taken separately or, at times, not at all and outsiders are not present. The meeting topics are treated as confidential and shared only with the appropriate personnel.
What is the purpose of an executive session?
An executive session provides an opportunity for the board of directors to convene in private to handle sensitive and confidential matters. These sessions also allow for more frank and direct communication as the conversation stays within the room.
How do you conduct an executive session?
During the regular meeting, a board member raises a motion to conduct a closed session. This motion needs to be seconded and then gain a majority vote to commence the executive session. When the motion passes, all non-members either leave the meeting or the concerned members convene in a different setting.
Which topics might be discussed?
Depending on the organisation or governmental body involved, business conducted in executive session could include:
Performance evaluations
Assessment and discussions of a board member’s performance and other personnel issues, such as hiring and firing, remuneration and disciplinary action.
Contractual issues
A board might hold an executive session to consider sensitive matters relating to entering contracts with third parties.
Legal matters
Legal issues are discussed in private as they can involve commercially sensitive information. Legal concerns that a board might discuss within an executive session includes purchasing a piece of land or upcoming litigation action.
Negotiation strategies
Closed sessions are also held to discuss negotiation strategies with industry experts and consultants concerning labour, new business opportunities and leveraging new suppliers.
Confidential information
Some topics are prohibited from being disclosed to the general public, such as unpublished financial records, damage control, mergers and business acquisitions.
How to record the outcomes?
The executive meeting minutes are recorded unless explicitly stated otherwise. The key points of discussion and the outcomes of decisions are noted down in only broad detail. The written record is kept separate from the regular meeting minutes and accessible only by the members who attended the closed session.
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