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The full form of CEO stands for Chief Executive Officer. A Chief Executive Officer (CEO) of a company is the leader of the corporation and the principal decision-maker of the company. Metaphorically speaking, a CEO is effectively the captain of the ship.
A CEO only reports to either the chairman of the company or the board of directors, depending on the nature and shareholding structure of the company.
As mentioned above, the CEO is the principal decision maker of the corporation. His roles and responsibilities include the following:
A CEO will typically report to the board of directors, as it is the board of directors that have approved the selection of the CEO. The board of directors are made up of the largest shareholders of the company, and it is the responsibility of the CEO to implement the strategy and vision of the board of directors.
Quite simply, the board may take certain high-level decisions after board meetings and the CEO will follow-through on these decisions.
It is also important to note that reporting structure of a CEO depends on the type of company. A large public company’s CEO may report to the chairman of the board of directors but a small privately owned company may report directly to the owner of the company.
There are at times when the CEO himself is the owner of a privately held company and the majority shareholder. Therefore, it is important to understand the hierarchy within a company to find out who does its CEO report to.
When it comes to a public company, the board of directors appoints a CEO. It is the task of the board to discuss amongst each other and decide on the most suitable candidate for the role of CEO. The board may also formulate a CEO search committee for this task.
When it comes to a private company, the appointment of CEOs is typically more nuanced. The appointment is predicated on the ownership structure of the privately held company. For instance, in small privately held companies, the founders can directly appoint the CEO without much oversight.
Large private companies may also have a board of directors that are made up of the largest shareholders of the company, and it would fall within the responsibilities of the board to appoint the CEO.
As of 2023, these are the top CEOs in India along with their salaries.
Kotak Mahindra Bank
Ignatius Navil Noronha
As of 2023, these are the top global CEOs with their salaries.
A CEO is the top most executive of a company. Everyone apart from the board of directors come under his leadership. A CFO is generally appointed by a CEO and is tasked with handling the financial responsibilities of a company like budgeting and financial planning.
The CEO (Chief Executive Officer) and COO (Chief Operating Officer) are both high-level executives of a corporation. The distinctions lie in their focus, authority and responsibilities.
A CEO is tasked with bringing the vision of the board of directors to life. It is the task of the CEO to engage in day to day activities that move the company forward in accordance with the policies and strategies set forth by the board of directors.
Mentioned within are some of the most important differences between a CEO and board of directors:
This article is written by Team InsuranceLiya.com, an independent website that writes about insurance, finance, health, and more. Our writers have a wealth of knowledge, experience, and degrees in the fields of insurance, finance, economics, and beyond.