Added: 02/08/2006 |
The chief executive officer plays the most important role in the management of an organizationThe chief executive officer is the most important role in the management of an organization. All organizations have specific goals and objectives that they strive to meet. Top executives devise strategies and formulate policies to ensure that these objectives are met. Although they have a wide range of titles such as chief executive officer, chief operating officer, board chair, president, vice president, school superintendent, county administrator, or tax commissioner. All formulate policies and direct the operations of businesses and corporations, public sector organizations, nonprofit institutions, and other organizations.
The definition of "chief executive officer" (almost always) depends on whether a business is a corporation or not, that is, whether it (usually) has a board of directors or not. In an organization that has a board of directors, the "chief executive officer" is (usually) the singular organizational position that is primarily responsible to carry out the strategic plans and policies as established by the board of directors. In this case, the chief executive reports to the board of directors. In a form of business that is usually without a board of directors (sole proprietorship, partnership, etc.), the "chief executive officer" is (usually) the singular organizational position (other than partnerships, etc.) that sets the direction and oversees the operations of an organization.
A chief executive officer (CEO) or chief executive is the highest-ranking corporate officer or executive officer of a corporation, company, or agency.
In the United States the CEO may also be the chairman of the board or the company president in small businesses, but these roles are often separated in larger organizations, to prevent the company from becoming dominated by a single personality, and to prevent a conflict of interest against the owners (the shareholders). Often, one person shares the chairman and CEO titles while another takes on the president and COO titles. Regardless, in virtually all cases where the CEO and president are not the same person, the CEO is of the higher rank.
In the European Union 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). Thus, 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.
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. There are always CEO conference.
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