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A chief executive officer (CEO), chief administrator officer, or just chief executive (CE), is one of a number of
corporate executives A corporation is an organization—usually a group of people or a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal ...
in charge of managing an
organization An organization, or organisation (Commonwealth English The use of the English language English is a of the , originally spoken by the inhabitants of . It is named after the , one of the ancient that migrated from , a peninsu ...

organization
especially an independent
legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a unified whole. A system, surrounded and influenced by its environment, is described by it ...
such as a
company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common pu ...

company
or
nonprofit institution A nonprofit organization (NPO), also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in contrast with an entity that oper ...
. CEOs find roles in a range of organizations, including public and private
corporation A corporation is an organization—usually a group of people or a company—authorized by the State (polity), state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal ...

corporation
s, non-profit organizations and even some government organizations (notably
state-owned enterprise A state-owned enterprise (SOE) or government-owned enterprise (GOE) is a business enterprise where the government or state has significant control through full, majority, or significant minority ownership. Defining characteristics of SOEs are ...
s). The CEO of a corporation or company typically reports to the
board of directors A board of directors is a group of people who jointly supervise the activities of an organization An organization, or organisation (Commonwealth English The use of the English language English is a West Germanic languages, W ...
and is charged with maximizing the value of the business, which may include maximizing the share price, market share, revenues or another element. In the non-profit and government sector, CEOs typically aim at achieving outcomes related to the organization's mission.


Responsibilities

The responsibilities of an organization's CEO are set by the organization's
board of directors A board of directors is a group of people who jointly supervise the activities of an organization An organization, or organisation (Commonwealth English The use of the English language English is a West Germanic languages, W ...
or other authority, depending on the organization's structure. They can be far-reaching or quite limited and are typically enshrined in a formal delegation of authority regarding business administration. Typically, responsibilities include being a decision maker on business strategy and other key policy issues,
leader Leadership, both as a research area and as a practical skill, encompasses the ability of an individual, group or organization An organization, or organisation (Commonwealth English The use of the English language English ...

leader
, manager, and executor. The communicator role can involve speaking to the press and the rest of the outside world, as well as to the organization's management and employees; the decision-making role involves high-level decisions about policy and strategy. As an executive officer of the company, the CEO reports the status of the business to the board of directors, motivates employees, and drives change within the organization. As a manager, the CEO presides over the organization's day-to-day operations. The CEO is the person who is ultimately accountable for a company's business decisions, including those in operations, marketing, business development, finance, human resources, etc. The CEO of a company is not necessarily the owner or the head of the company. The CEO of a political party is often entrusted with fundraising, particularly for election campaigns.


International use

In some countries, there is a
dual board Dual or Duals may refer to: Paired/two things * Dual (mathematics), a notion of paired concepts that mirror one another ** Dual (category theory), a formalization of mathematical duality ** . . . see more cases in :Duality theories * ...
system with two separate boards, one
executive board A board of directors is a group of people who jointly supervise the activities of an organization An organization, or organisation ( Commonwealth English; see spelling differences), is an entity – such as a company, an institution, ...
for the day-to-day business and one
supervisory board A supervisory board or supervisory committee, often called '' board of directors'', is a group of individuals chosen by the stockholders of a company A company, abbreviated as co., is a Legal personality, legal entity representing an associa ...
for control purposes (selected by the shareholders). In these countries, the CEO presides over the executive board and the
chairman The chairperson (also chair, chairman, or chairwoman) is the presiding officer of an organized group such as a board Board or Boards may refer to: Flat surface * Lumber, or other rigid material, milled or sawn flat ** Plank (wood) ** Cutting ...

chairman
presides over the supervisory board, and these two roles will always be held by different people. This ensures a distinction between
management Management (or managing) is the administration of an organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, -ize (-isation, -iz ...

management
by the executive board and
governance Governance is all the processes of interactions be they through the laws Law is a system of rules created and law enforcement, enforced through social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity ...

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. In the United States, the
board of directors A board of directors is a group of people who jointly supervise the activities of an organization An organization, or organisation (Commonwealth English The use of the English language English is a West Germanic languages, W ...
(elected by the
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a Trust law, trust or partnership) that is registered by the corporation as the ...
s) is often equivalent to the supervisory board, while the executive board may often be known as the
executive committee A committee or commission is a body of one or more persons subordinate to an assembly. A committee is not itself considered to be a form of assembly. Usually, the assembly sends matters into a committee as a way to explore them more fully than wo ...
(the division/subsidiary heads and C-level officers that report directly to the CEO). In the United States, 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, executive officer is any member, manager, or officer.


Related positions

Depending on the organization, a CEO may have several subordinate executives to help run the day-to-day administration of the company, each of whom has specific functional responsibilities referred to as senior executives, executive officers or corporate officers. Subordinate executives are given different titles in different organizations, but one common category of subordinate executive, if the CEO is also the president, is the
vice-president A vice president (in British English: vice-president for governments and director for businesses) is an officer in government A government is the system or group of people governing an organized community, generally a State (polity), ...
(VP). An organization may have more than one vice-president, each tasked with a different area of responsibility (e.g., VP of
finance Finance is a term for the management, creation, and study of money In a 1786 James Gillray caricature, the plentiful money bags handed to King George III are contrasted with the beggar whose legs and arms were amputated, in the left corn ...

finance
, VP of
human resources Human resources is the set of people who make up the workforce of an organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British English spelling differences#-ise, - ...

human resources
). Examples of subordinate executive officers who typically report to the CEO include the
chief operating officer A chief operating officer (COO), also called a chief operations officer, is one of the highest-ranking executive positions in an organization, composing part of the " C-suite". The COO is usually the second-in-command {{unreferenced, date=May 200 ...
(COO),
chief financial officer The chief financial officer (CFO) is the officer An officer is a person who has a position of authority In the fields of sociology Sociology is the study of society, human social behaviour, patterns of social relationships, social intera ...
(CFO),
chief strategy officer A chief strategy officer (CSO) is an executive Executive may refer to: Role, title, or function * Executive (government), branch of government that has authority and responsibility for the administration of state bureaucracy * Executive, a senior m ...
(CSO), and
chief business officer Chief business officer (CBO) is the position of the top operating executive of growing commercial companies or an academic/research institution (such as a university, college, institute, or teaching hospital). In the commercial space, CBO shows le ...
(CBO). The
public relations Public relations (PR) is the practice of managing and disseminating information from an individual or an organization An organization, or organisation (English in the Commonwealth of Nations, Commonwealth English; American and British E ...
-focused position of chief reputation officer is sometimes included as one such subordinate executive officer, but, as suggested by Anthony Johndrow, CEO of Reputation Economy Advisors, it can also be seen as "simply another way to add emphasis to the role of a modern-day CEO – where they are both the external face of, and the driving force behind, an organisation culture".


United States

In the US, the term ''chief executive officer'' is used primarily in business, whereas the term ''executive director'' is used primarily in the not-for-profit sector. These terms are generally mutually exclusive and refer to distinct legal duties and responsibilities. Implicit in the use of these titles, is that the public not be misled and the general standard regarding their use be consistently applied.


United Kingdom

In the UK, ''chief executive'' and ''chief executive officer'' are used in
local government Local government is a generic term for the lowest tiers of public administration Public administration is the implementation of government policy Public policy is a course of action created and/or enacted, typically by a government ...
, business, and the . , the use of the term ''
director Director may refer to: Literature * Director (magazine), ''Director'' (magazine), a British magazine * The Director (novel), ''The Director'' (novel), a 1971 novel by Henry Denker * The Director (play), ''The Director'' (play), a 2000 play by Nanc ...
'' for senior charity staff is deprecated to avoid confusion with the legal duties and responsibilities associated with being a charity director or trustee, which are normally non-executive (unpaid) roles. In the United Kingdom, the term ''managing director'' is often used in lieu of ''chief executive officer''.


Celebrity CEOs

Business publicists since the days of
Edward Bernays Edward Louis Bernays ( , ; November 22, 1891 − March 9, 1995) was an American pioneer in the field of public relations Public relations (PR) is the practice of managing and disseminating information from an individual or an organization ...
(1891-1995) and his client
John D. Rockefeller John Davison Rockefeller Sr. (July 8, 1839May 23, 1937) was an American American(s) may refer to: * American, something of, from, or related to the United States of America, commonly known as the United States The United States of Am ...

John D. Rockefeller
(1839-1937) and even more successfully the corporate publicists for
Henry Ford Henry Ford (July 30, 1863 – April 7, 1947) was an American industrialist A business magnate is someone who has achieved great success and enormous wealth through the ownership of multiple lines of enterprise. The term characteristicall ...

Henry Ford
, promoted the concept of the "
celebrity Celebrity is a condition of fame and broad public recognition of an individual or group as a result of the attention given to them by mass media. A person may attain a celebrity status from having great wealth, their participation in sports ...
CEO". Business journalists have often adopted this approach, which assumes that the corporate achievements, especially in the arena of manufacturing, are produced by unique talented individuals, especially the "heroic CEO". In effect, journalists celebrate a CEO who takes distinctive strategic actions. The model is the
celebrity Celebrity is a condition of fame and broad public recognition of an individual or group as a result of the attention given to them by mass media. A person may attain a celebrity status from having great wealth, their participation in sports ...
in entertainment, sports, and politics - compare " Great man theory". Guthey ''et al.'' argue that "...these individuals are not self-made, but rather are created by a process of widespread media exposure to the point that their actions, personalities, and even private lives function symbolically to represent significant dynamics and tensions prevalent in the contemporary business atmosphere". Journalism thereby exaggerates the importance of the CEO and tends to neglect harder-to-describe broader corporate factors. There is little attention to the intricately organized technical bureaucracy that actually does the work. Hubris sets in when the CEO internalizes the celebrity and becomes excessively self-confident in making complex decisions. Indeed, there may be an emphasis on the sort of decisions that attract the celebrity journalists. Research published in 2009 by Ulrike Malmendier and Geoffrey Tate indicates that "firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance".


Criticism


Executive compensation

Executive compensation has been a source of criticism following a dramatic rise in pay relative to the
average worker's wage Average wage is the mean There are several kinds of mean in mathematics Mathematics (from Ancient Greek, Greek: ) includes the study of such topics as quantity (number theory), mathematical structure, structure (algebra), space (geometry), ...
. For example, the relative pay was 20-to-1 in 1965 in the US, but had risen to 376-to-1 by 2000. The relative pay differs around the world, and, in some smaller countries, is still around 20-to-1. Observers differ as to whether the rise is due to competition for talent or due to lack of control by compensation committees. In recent years, investors have demanded more say over executive pay.


Diversity

Lack of diversity amongst chief executives has also been a source of criticism. In 2018, 5% of
Fortune 500 The ''Fortune'' 500 is an annual list compiled and published by ''Fortune Fortune may refer to: General * Fortuna or Fortune, the Roman goddess of luck * Luck, a chance happening, or that which happens beyond a person's controls * Wealth, an a ...
CEOs were women. The reasons for this are explained or justified in various ways, and may include biological sex differences, male and female differences in
Big Five personality traits The Big Five personality traits is a suggested taxonomy, or grouping, for personality traits, developed from the 1980s onwards in psychological trait theory. When factor analysis (a statistical technique) is applied to personality test, personalit ...
and temperament, sex differences in psychology and interests, maternity and career breaks,
hypergamy Hypergamy (colloquially referred to as "marrying up") is a term used in social science for the act or practice of a person marrying a spouse of higher caste or social status than themselves. The antonym "hypogamy" refers to the inverse: marrying ...
,
phallogocentrism In critical theory and deconstruction, phallogocentrism is a neologism A neologism (; from Greek νέο- ''néo-'', "new" and λόγος ''lógos'', "speech, utterance") is a relatively recent or isolated term, word, or phrase that may be in t ...
, the existence of
old boy network An old boy network (also known as old boys' network, ol' boys' club, old boys' club, or old boys' society) can refer to social and business connections among white former pupils of male-only elite schools. The term originated from much of the ...
s, tradition, and the lack of female role models in that regard. Some countries have passed laws mandating boardroom gender quotas.


See also

*
CEO succession CEO succession refers to the process by which board of directors, boards of directors ensure that their organization has the ability to sustain excellence in CEO leadership over time, with transitions from one leader to the next. Commercial import ...
* CEO of public schools * Executive officer *
Glass cliff The glass cliff is the phenomenon of women in leadership roles, such as Women in business, executives in the corporate world and Women in government, female political election candidates, being likelier than men to achieve leadership roles during p ...
* List of books written by CEOs *
List of chief executive officers The following is a list of chief executive officer A chief executive officer (CEO), chief administrator, or just chief executive (CE), is one of a number of corporate executives in charge of managing an organization especially an independent ...
*
Occupational Information NetworkThe Occupational Information Network (O*NET) is a free online databaseAn online database is a database A database is an organized collection of data Data are units of information Information can be thought of as the resolution of uncert ...
*
United States Department of Labor The United States Department of Labor (DOL) is a cabinet-level department of the U.S. federal government, responsible for occupational safety and health Occupational safety and health (OSH), also commonly referred to as occupational health ...
*
Prime minister A prime minister or a premier is the head of the cabinet Cabinet or The Cabinet may refer to: Furniture * Cabinetry, a box-shaped piece of furniture with doors and/or drawers * Display cabinet, a piece of furniture with one or more transpa ...
*
City manager A city manager is an official appointed as the administrative Administration may refer to: Management of organizations * Management Management (or managing) is the administration of an organization, whether it is a business, a not-for ...


References


Further reading

* * * * Vancil, Richard F. ''Passing the baton: Managing the process of CEO succession'' (Harvard Business School Press, 1987).


External links

* * {{DEFAULTSORT:Chief Executive Officer
Management occupations Occupations relating to management. Business occupations Management, Occupations Positions of authority {{CatAutoTOC ...
E Positions of authority Leadership