Chief executive officer
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A chief executive officer (CEO) or chief executive is one of the highest-ranking corporate officers (executives) or administrators in charge of total management. An individual selected as president and CEO of a corporation, company, organization, or agency, reports to the board of directors.
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[edit] Responsibilities
It is the responsibility of the chief executive officer to align the company, internally and externally, with their strategic vision. The core duty of a CEO is to facilitate business outside of the company while guiding employees and other executive officers towards a central objective. The size and sector of the company will dictate the secondary responsibilities. A CEO must have a balance of internal and external initiatives to build a sustainable company.[1]
- For corporations, the CEO primarily coordinates external initiatives at a high level. As there are many other c-level executives (e.g. marketing, information, technical, financial etc.), seldom do corporate CEOs have low-level functions.
- For emerging entrepreneurs, their acting position as a CEO is much different than that on the corporate level. As often times other c-level executives are not incorporated in small operations, it is the duty of the CEO (and sometimes founder) to assume those positions.
- Mid-sized companies borrow from corporate and entrepreneurial CEO responsibilities. There will not be all c-level positions available so the CEO must compensate for gaps either through delegating or assuming additional responsibility.
[edit] International use
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 CEO presides over the executive board and the chairman presides over the supervisory board, and these two roles will always be held by different people. This ensures a distinction between management by the executive board and governance by the supervisory board. This 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. There is a strong parallel here with the structure of government, which tends to separate the political cabinet from the management civil service.
In other parts of the world, such as Asia, it is possible to have two or three CEOs in charge of one corporation. In the UK, 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, similar to a sizable percentage of public companies in the US, the chair(man) (of the board) in public companies is more senior than the chief executive (who is usually known as the managing director). Most public companies now split the roles of chair and chief executive.
In Russia, a CEO is known as Russian: генеральный директор (generalnyi direktor). In France, a CEO/MD is known as the "PDG" (French: président directeur général); in Sweden, the CEO/MD is known as "VD" (Swedish: verkställande direktör); in Australia, the CEO can be known as the "MD" (managing director); in India, it is either Managing Director or CEO though CEOs are very common especially with the startup boom; in Pakistan it's called MD (Managing Director); in Spain, the usual name is "director general, the other mostly commonly used being "Consejero Delegado";" while in Italy, the position is called "AD" (Italian: amministratore delegato). In Denmark and Norway the CEO is known as the "administrerende direktør", abbr. adm.dir. In Finland, CEO is known as "TJ" (Finnish: toimitusjohtaja).
In the US, and in business, the executive officers are usually the top officers of a corporation, the chief executive officer (CEO) being the best-known type. The definition varies; for instance, the California Corporate Disclosure Act defines "executive officers" as the five most highly-compensated officers not also sitting on the board of directors. In the case of a sole proprietorship, an executive officer is the sole proprietor. In the case of a partnership, an executive officer is a managing partner, senior partner, or administrative partner. In the case of a limited liability company, an executive officer is any member, manager, or officer.
[edit] Structure
Typically, a CEO has several subordinate executives, each of whom has specific functional responsibilities.
Common associates include a chief financial officer (CFO), chief operating officer (COO), Chief Legal Officer(CLO), chief technical officer (CTO), chief marketing officer (CMO), chief information officer (CIO), chief creative officer (CCO), chief compliance officer (CCO), and a director, or Vice-President of human resources.
[edit] In the media
CEOs are often portrayed erroneously in movies and the media as the highest-ranking officer of the company. Similarly, the CEO and not the chairman is most often mentioned in articles regarding companies.
[edit] CEO search firms
According to the Association of Executive Search Consultants, 60% of public company CEOs are recruited through executive search firms.[citation needed]
