Chief executive officer
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- For other uses, see Chief Executive (disambiguation)
A chief executive officer (CEO), or chief executive, is the highest-ranking corporate officer or executive officer of a corporation, or agency. A corporation is any company that has been incorporated, be it PLC, LTD or limited by guarantee.
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CEO
In closely held corporations, it is general business culture that the office CEO is also the chairman of the board. Specifically, one person shares the chairman and CEO titles while another person takes the presidency or may become chief operating officer (COO). Regardless, in virtually all cases where the CEO and president are not the same person, the CEO is of the higher rank and ultimate authority. However, the term president is from the U.S. and in the UK COO is favoured. Underneath that comes the Executive Vice President (U.S.) or Executive Director (UK). In publically held corporations, the CEO and chairman positions can be separated but there are implications in corporate governance by doing so.
In some European Union countries, there are two separate boards, one executive board for the day-to-day business and one supervisory board for control purposes (elected by the shareholders). In these countries, the chief executive and the chairman of the board will always be different people. This ensures a distinction between governance and management and allows for clear lines of authority. The aim is to prevent a conflict of interest and too much power being concentrated in the hands of one person.
In rare circumstances an Executive Chairperson can be appointed but this is either illegal in many jurisdictions or frowned upon by Regulators.
In the United Kingdom many Charities and Government Agencies are headed by a Chief Executive who is answerable to a Board of Trustees or Board of Directors. In the UK, the Chairman (of the Board) in public companies is more senior than the Chief Executive. Most public companies now split the rôle of Chairman and Chief Executive.
The term "Chief Executive" is also sometimes used to refer to the politician who is the active ruler of a nation, in circumstances where the titles are not clear. For example, in Israel the Prime Minister of Israel is the nation's chief executive, while the President of Israel is not.
Skill requirements
Qualified CEOs of corporations should have leadership skills and be able to act decisively regarding, human, financial, environmental and technical challenges that face a corporation. They should have strong inter-personal skills and be familiar with Human Resources, Accountancy/Finance, Marketing and anything else generally related. The CEO must ultimately ensure that the corporation is constantly improving through a structured approach that is inline with the owners orientation to risk/reward. They must then report to the Board of Directors in the annual meeting.
James Mulva has said in a 2006 interview with Jim Lehrer that "CEO pay should be tied to performance" when asked about the retirement package of Lee Raymond of Exxon-Mobil.
Reporting structure
Typically, a CEO has cadre of subordinate executives, each of which has specific functional responsibilities. These direct reporting relationships most often include: Chief Financial Officer, Chief Operating Officer, Chief Marketing Officer, and Chief Information Officer. Although not an Executive, the Director of Human Resources plays a vital role within any corporation.
However, depending on the industry in which the company operates and/or the organizational structure the company has employed, various other functional areas may be highlighted through the CEO's direct span of control. Some of these less common monikers include: Chief (Business) Development Officer, Chief Information Officer, Chief Knowledge Officer, Chief Strategy Officer, Chief Risk Officer, and Chief Credit Officer.
See also
- Corporate officer
- Corporate title
- Chief financial officer
- Chief operating officer
- Chief analytics officer
- Chief information officer
- Chief networking officer
- Chief data officer
- Chief technical officer
- Chief technology officer
- Corporate governance
- Executive compensation
- Managing director
Lists
External links
- Coryphaeus CEO Curriculum at the Thierry Graduate School of Leadership
- Chief Executive Officer and Corporate Governance
- The Basics of Corporate Structure
- The Chief Executive Leadership Institute at the Yale School of Management
- Yale Center for Corporate Governance & Performance at the Yale School of Management
- CEOQnet
