A chief executive officer (CEO, American English), managing director (MD, British English)[1], Executive Director (ED, American English) for non-profit organizations, or chief executive is the highest-ranking corporate officer (executive) or administrator in charge of total management of an organization. An individual appointed as a CEO of a corporation, company, organization, or agency typically reports to the board of directors.
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The responsibilities of an organization's CEO (US) or MD (UK) are set by the organization's board of directors or other authority, depending on the organization's legal structure. They can be far-reaching or quite limited and are typically enshrined in a formal delegation of authority.
Typically, the CEO/MD has responsibilities as a communicator, decision maker, leader, and manager. The communicator role can involve the press and the rest of the outside world, as well as the organization's management and employees; the decision-making role involves high-level decisions about policy and strategy. As a leader, the CEO/MD advises the board of directors, motivates employees, and drives change within the organization. As a manager, the CEO/MD presides over the organization's day-to-day, month-to-month, and year-to-year operations.[2]
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. In the United States, the board of directors (elected by the shareholders) is often equivalent to the supervisory board, while the executive board may often be known as the executive committee (the division/subsidiary heads and C-level officers that report directly to the CEO).
In other parts of the world, such as Asia, it is 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 answers to a board of trustees or board of directors. In the UK, similar to a sizable percentage of public companies in the US, the chairman of the board in public companies is more senior than the chief executive (who is usually known as the managing director).
The following presents an alphabetical list of some international common terms for the CEO position:
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, an executive officer is any member, manager, or officer.
Typically, a CEO has several subordinate executives, each of whom has specific functional responsibilities.
Common associates include a chief business development officer (CBDO), chief financial officer (CFO), chief operating officer (COO), chief marketing officer (CMO), chief information officer (CIO), chief communications officer (CCO), chief legal officer (CLO), chief technology officer (CTO), chief risk officer (CRO), chief creative officer (CCO), chief compliance officer (CCO), chief audit executive (CAE), chief diversity officer (CDO), or chief human resources officer (CHRO).
Hospitals and healthcare organizations also often include a chief medical officer (CMO), a chief nursing officer (CNO), and a chief medical informatics officer (CMIO).
In the United Kingdom the term 'director' is used instead of 'chief officer'. Associates include the audit executive, business development director, chief executive, compliance director, creative director, director of communications, diversity director, financial director, human resources director, information technology director, legal affairs director, managing director (MD), marketing director, operations director and technical director.