Chapter 5. CEO and Chairperson
After reading this chapter, you will be able to
Understand the significance of the role of the chief executive officer (CEO)
Understand the distinction between the CEO and the board chairperson
Understand the issues surrounding CEO compensation
Understand the importance of careful planning in regard to CEO succession
The CEO is a board-appointed member of a corporation’s management team. The primary role of a CEO is to run the company in a successful manner, thereby securing the interests of shareholders and the value of their stocks.
CEOs are necessary members of the company, because they, unlike shareholders or even board members, have the specific experience and education to run the daily events of the corporation.
There are times when the board and the CEO disagree about what decisions are in the best interest of the corporation. When disagreements such as these occur, the decision of the board is meant to veto that of the CEO. This organizational structure stems from the internal hierarchy of the corporation; the board defers to the shareholders, and the executive defers to the board.
This chapter discusses the concept of the CEO as it relates to corporate structure, relationships with the board, and distinctions from the role of the chairperson.
Understanding the expectations of the CEO, the issues surrounding compensation, and CEO succession practices is integral to creating a complete picture of corporate structure. Reading these pages will provide ...
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