Chief Executive Officer (CEO)

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Chief executive officer of the company is the highest-ranking official of the company. The CEO of the company is the individual selected by the board of directors (BOD) as the leading figure of the company who has a complete or limited authority on the company’s operations depending on the articles of association of the company.

Role of CEO

Chief executive officer (CEO) of the company is often mixed with the Chairman of the company. This general misconception arises due to the lack of knowledge of the Codes of the Cadbury committee. Codes of Cadbury committee state that a Chairman must be a separate person to the CEO of the company since the Chairman is the head of the company according to the hierarchy of the company. While the Chairman of the company is the non-executive director of the company, the CEO is the executive director of the company and to exert control and monitoring on the executive directors of the company, Chairman is allocated as the leader of the board of directors (BOD). However, this organizational hierarchy is only applicable in the entities that follow the codes of Cadbury committee. The entities not following the codes of Cadbury committee usually appoints the same person at both the positions of Chairman and CEO.

Authority of the CEO

Although the authority of the CEO depends on the guidelines defined in the articles of association of the company, usually the CEO of the company has the highest authority in the organization. Any decision that is being made in the board of directors (BOD) must be approved by the CEO of the company.

Remuneration of the CEO

Usually, it is a general practice to disallow a director to be involved in selection of his or her remuneration; therefore, like all the other directors of the company, CEO of the company is not involved in his or her own remuneration process.

Duties and responsibilities of the CEO

The CEOs are the spokespersons and the leaders of the organization; they are selected by the board of directors of the company and are usually responsible to the board, which is responsible to the shareholders of the company, although shareholders cannot interfere in day-to-day operations and decisions of the company.   

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