VC & PE Glossary
What Is Executive Session?
Updated
Definition
An executive session is a board meeting segment—or separate meeting—where independent directors or investors meet without management present to discuss sensitive governance, performance, or compensation topics.
Useful for: Founders, Investors
An executive session is a portion of a board meeting, or a standalone session, where directors convene without company management to discuss matters that require candid dialogue or conflict-free deliberation.
How it works
Typical venture-backed boards include investor directors, independents, and the CEO. After the full board reviews KPIs and strategy, the chair may adjourn management and hold an executive session with non-management directors—or investors may meet as a class per charter rights. Topics include CEO compensation, succession planning, litigation exposure, M&A inbound interest, and whether management’s forecast is credible.
Investor-only sessions also occur outside formal board cadence when a lead needs LPAC alignment or syndicate consensus before a downstream round or sale vote. Minutes may be limited or kept in counsel’s files for attorney-client privilege on legal matters.
Founders who resist executive sessions often misunderstand their purpose: good governance requires space for directors to fulfill duties without forcing every sensitive topic through the CEO filter.
Why it matters
- Founders: Professional boards use executive sessions routinely; ask for a brief readout of actions requiring full-board ratification rather than demanding attendance.
- Investors: Document that executive sessions happened for governance best practice; use them to coordinate before delivering unified feedback in the full meeting.
Common mistake
Founders interpreting every executive session as plotting their removal. Most sessions cover compensation benchmarks, option refresh, or investor reporting—not imminent CEO changes.
Related ideas
See board seat, board observer, independent director, and board consent.
Related terms
- Board Observer — A board observer may attend board meetings and receive materials but typically cannot vote on resolutions. Lead investors often take observer rights when a full board seat is deferred or unavailable.
- Board Seat — A board seat is the right to appoint a representative as a voting director on the company's board of directors, usually negotiated in venture term sheets in exchange for a lead investment.
Common questions
Short answers for founders, LPs, and operators