Category: Board Structure and Roles

Executive Session

Also known as: Closed Session, Meeting-Within-a-Meeting

Simply put

An executive session is a private portion of a board meeting in which the board meets confidentially, closed to some or all non-members, to discuss sensitive matters. It allows directors to speak candidly while managing their fiduciary responsibilities. The specific rules governing when and how such sessions may be held vary by jurisdiction, sector, and entity type.

Formal definition

An executive session is a defined block within an otherwise open or regular board (or governing body) meeting during which the body deliberates privately, closed to the public or to specified persons, on sensitive or confidential matters. It typically serves to preserve board independence and confidentiality in the discharge of fiduciary duties, and in some contexts management or other non-members may be excluded. Whether minutes are taken, who may be excluded, and the permissible subjects for such sessions generally depend on the applicable governing rules, and, particularly for public bodies subject to open-meetings law, may be legally circumscribed and vary by jurisdiction and entity type. This entry is educational and not legal, audit, or compliance advice.

Why it matters

Executive sessions address a structural tension in board governance: directors owe fiduciary duties that sometimes require candid deliberation on matters where the presence of management or other non-members would inhibit frank discussion. By convening privately, the board can preserve its independence and protect confidentiality while addressing sensitive subjects. This capacity for closed deliberation is generally regarded as a hallmark of an independent, well-functioning board.

The significance of executive sessions varies considerably by entity type. For private companies and nonprofits, the practice is largely a matter of internal governance and board custom, offering a venue for directors to exercise candor away from those they oversee. For public bodies subject to open-meetings law, however, the ability to close a portion of a meeting is legally circumscribed, the permissible subjects, the persons who may be excluded, and the record-keeping requirements are typically defined by statute and vary by jurisdiction. Treating a public body's executive session as if it carried the same latitude as a private board's closed session can expose an entity to legal risk.

Because the governing rules differ across jurisdictions, sectors, and entity types, whether a given matter may be discussed in executive session, and how that session must be documented, generally depends on the applicable governing rules rather than on a single universal standard. This entry is educational and not legal, audit, or compliance advice; specific applications should be assessed against the relevant statutes, listing rules, or governing documents.

Who it's relevant to

Board members and independent directors

Directors are the primary participants in executive sessions and rely on them to deliberate candidly and preserve board independence while discharging their fiduciary duties. Understanding when a session is appropriate, who should be excluded, and how the discussion is recorded is part of exercising that responsibility.

Board chairs and lead independent directors

Those who set and run the agenda typically decide when to convene an executive session, manage who remains in the room, and ensure the session is used for genuinely sensitive matters. They also help maintain the balance between candor and appropriate documentation.

General counsel and corporate secretaries

These advisers guide the board on whether a matter may properly be handled in closed session, on record-keeping practices, and, particularly for public bodies subject to open-meetings law, on the legal limits governing when and how a meeting may be closed, which vary by jurisdiction.

Governing bodies of public and quasi-public entities

Public bodies operate under open-meetings laws that typically restrict the permissible subjects for executive session and impose specific procedural and documentation requirements. For these entities, the practice is legally circumscribed and depends on the applicable jurisdiction's statute.

Nonprofit boards and trustees

Nonprofit boards and trustees use executive sessions to maintain independence and protect confidentiality as they manage fiduciary duties, generally governed by their own bylaws and board policy rather than open-meetings law, though the specifics depend on the entity and jurisdiction.

Inside Executive Session

Meeting Without Management Present

An executive session is generally a portion of a board or committee meeting held with only directors present, excluding the CEO and other members of management, allowing independent discussion of sensitive matters.

Independent or Non-Executive Director Sessions

Many governance codes and listing rules contemplate that independent or non-executive directors meet separately, sometimes without any executive directors present, to preserve candor and independence of oversight.

Presiding Director or Chair Role

Executive sessions are typically led by an independent chair, lead independent director, or committee chair, depending on the board's structure and the governance framework or listing rules applicable to the entity.

Scope of Discussion

Topics commonly reserved for executive session may include CEO performance and succession, executive compensation, management concerns, auditor or advisor matters, and other issues where management's presence could constrain candor. The precise scope depends on the board's practices and applicable requirements.

Frequency and Documentation

The frequency of executive sessions and the extent to which they are minuted vary by jurisdiction, listing rule, and board practice; some frameworks encourage regular sessions while leaving documentation to the board's judgment.

Common questions

Answers to the questions practitioners most commonly ask about Executive Session.

Does holding an executive session mean the board is excluding management to hide something or signal a conflict?

Not typically. An executive session is a routine governance practice in which directors, or a subset of directors, meet without members of management present. Rather than signaling suspicion or crisis, regularly scheduled executive sessions are generally regarded as a hallmark of effective board oversight, allowing directors to discuss matters candidly. Under certain listing standards and governance codes, sessions of independent or non-executive directors are expected as a matter of course. Their occurrence, on its own, should not be read as indicating a specific problem.

Is an executive session the same as a closed or confidential meeting of the full board?

Not necessarily. The defining feature of an executive session is generally the exclusion of management (and often non-independent directors or other attendees), not simply confidentiality. A full board meeting may be confidential yet still include the CEO and other executives. An executive session, by contrast, typically refers to a portion of a meeting reserved for directors without management, or for independent or non-executive directors alone. The precise composition depends on the entity's governance framework, applicable listing rules, and the purpose of the session.

Who typically presides over an executive session of independent directors?

In many governance structures, an executive session of independent or non-executive directors is chaired by an independent board leader, such as an independent chair, a lead independent director, or a senior independent director, depending on the entity's leadership model. Where the roles are combined, a designated lead or presiding director often fills this function. The specific arrangement should be set out in the board's governance documents, and practices vary by jurisdiction, listing rules, and entity type.

How often should a board hold executive sessions?

Frequency depends on the applicable framework and the board's own judgment. Some listing standards and governance codes contemplate that independent or non-executive directors meet without management at regular intervals, and many boards schedule an executive session as a standing item at each regular meeting. Committees such as audit, remuneration, and nominating may also hold their own sessions with and without relevant executives or assurance functions. Boards generally document their expected cadence in a charter or governance policy rather than relying on ad hoc practice.

What should be documented from an executive session, and by whom?

Documentation practices vary by jurisdiction, entity type, and legal advice, so this is an area where boards typically consult counsel. Generally, boards seek to record that a session occurred and any resulting decisions or action items, while balancing the candor that executive sessions are meant to protect against the need for an adequate record. Because management is absent, the presiding director or another designated participant often takes responsibility for capturing outcomes and communicating any follow-up. The appropriate level of detail is a matter of judgment informed by legal and governance considerations.

How should decisions or feedback from an executive session be communicated back to management?

A common approach is for the presiding director or board leader to convey relevant outcomes, requests, or feedback to the CEO or other executives after the session, preserving the confidentiality of the discussion while ensuring management receives what it needs to act. Establishing a clear channel and expectations for this feedback loop in advance helps avoid ambiguity. The specifics depend on the board's leadership structure and its governance policies.

Common misconceptions

Executive sessions are a universal legal requirement for all boards.

Whether executive sessions are required depends on jurisdiction, sector, entity type, and applicable listing rules or governance codes. In many regimes they are encouraged as best practice rather than mandated by statute, and requirements differ for listed, private, and other entities.

An executive session involves the executive management team, since it is called an 'executive' session.

Despite the name, an executive session generally refers to a meeting of directors held without management present. The term denotes a closed or private session of the board or a committee, not a session of executives.

Holding executive sessions shifts operational responsibility for management matters to the board.

Executive sessions support the board's oversight and assurance role; they do not transfer management's operational responsibilities to directors. Accountability for day-to-day management typically remains with executives, while the board retains its oversight function.

Best practices

Confirm whether executive sessions are expected or required under the listing rules, governance code, or legal requirements applicable to your jurisdiction and entity type, rather than assuming a single universal standard.

Designate an independent chair or lead independent director to preside over executive sessions, consistent with the board's structure and applicable framework.

Schedule executive sessions on a regular, recurring basis so their occurrence is not interpreted as signaling a specific problem, adapting frequency to the board's needs and any governance code expectations.

Clarify in advance the categories of matters typically reserved for executive session, such as CEO performance, succession, and auditor or advisor concerns, while allowing flexibility for issues that arise.

Establish a clear approach to documenting executive sessions and communicating any resulting decisions or follow-up actions to management, using the board's judgment on the appropriate level of minuting.

Preserve the distinction between the board's oversight role in executive session and management's operational responsibilities, avoiding drift into managing day-to-day matters.