Definitions

chief executive

Chief executive officer

A chief executive officer (CEO) or chief executive is typically the highest-ranking corporate officer (executive) or administrator in charge of total management of a corporation, company, organization, or agency, reporting to the board of directors. In internal communication and press releases, many companies capitalize the term and those of other high positions, even when they are not proper nouns.

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, its 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, the chair (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 France, a CEO/MD is known as the "PDG" (président directeur général); in Sweden, the CEO/MD is known as "VD" (verkställande direktör); in Australia, the CEO can be known as the "MD" (managing director); in Spain, the usual name is "director general"; while in Italy, the position is called "AD" (amministratore delegato). In Denmark and Norway the CEO is known as the "administrerende direktør", abbr. adm.dir.

In the US, and in business, the executive officers are 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.

In the airline industry, the Executive Officer, more commonly known as the First Officer, is the second in command of the aircraft. In a fixed wing aircraft the First Officer sits in the right-hand seat but a rotary wing aircraft they sit on the left.

Structure

Typically, a CEO has several subordinate executives, each of whom has specific functional responsibilities.

Common associates includes a chief financial officer (CFO), chief operating officer (COO), chief technical officer (CTO), chief marketing officer (CMO), chief information officer (CIO), and a director, or Vice President, of human resources.

See also

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