Episode 10: Going into Executive Session

Premiere Date: October 12, 2022
Panel: Allan GrafmanChristina Rashid, and Becky Sharpe

This episode will soon be available on-demand on FinancialPoise.com
PowerPoint not yet available for this episode.

Executive sessions of the board are meetings held by non-management directors without senior management in attendance, although the CEO may meet with the non-management directors prior to or after the executive session. Executive sessions are a special meeting-within-a-meeting that provides an opportunity for the board to meet privately to handle sensitive and confidential issues, foster robust dialogue, and strengthen trust and communication. Matters discussed in executive sessions are highly confidential.

Regularly scheduled executive sessions set an expectation that private discussion amongst independent directors will be handled as a matter of course, so as not to disarm or send a message which might be perceived as unusual or threatening.

Although executive sessions are mandated for NYSE and NASDAQ-listed companies, they are appropriate and considered a best practice for public, private, and nonprofit entities, as these sessions allow for more candid discussion. As a general rule, an executive session should be regularly scheduled and not the exception.

This 10th episode of Bare Bone Board Basics provides useful tools for better understanding the following:

  • the  purpose of executive sessions;
  • topics most appropriate for executive sessions;
  • how boards determine and document the methodology for cadence and timing of executive sessions of the board and its standing committees;
  • who should preside/attend;
  • documentation (or not)/disclosure requirements; and
  • pre and post-session interface with the CEO.

Although the discussion will primarily focus on private company executive sessions, it will share high-level requirements for executive sessions as outlined by the NYSE and NASDAQ.