Business, Legal & Accounting Glossary
An acronym for the Chief Executive Officer, the person who is responsible and accountable for the functioning of a company as a whole. A CEO is also often referred to as the “president” or “director” of a company. A CEO usually reports directly to the company’s board of directors.
the corporate executive responsible for the operations of the firm; reports to a board of directors; may appoint other managers (including a president)
CEO or chief executive officer is a bureaucratic position that carries the ultimate management responsibility for an organization. Commonly, the CEO is a rank that is associated with the head of the company. One of the primary duties of the CEO is to report to the board of directors, which is answerable to the owners of the company. In addition, the CEO carries out the job of designating other managerial officers including that of a president. Depending on the extent of his or her functions, a CEO can also have the title of President/CEO or President and CEO. A CEO is not only a key management figure but also the face of any business establishment. Therefore CEO’s career record and professional background often represent an important qualitative parameter of the overall value of the company.
The CEO is the gal running the whole show. She’s ultimately responsible for the economic condition of the company as well as its direction and corporate culture. In a larger public company, the CEO likely will delegate day-to-day decisions to managers and supervisors after receiving policy decisions and overarching goals from the board of directors (who are elected by shareholders). The job description of the CEO can vary by company and some CEOs might be more high-profile than others, such as Apple’s Steve Jobs, who is also a co-founder and the distinctive public face of the company.
The CEO is the liaison between the board of directors, who represent shareholders, and the managers of the company. A CEO can also be a member of the board of directors.
You don’t need to be able to pick the CEO of your company out of a lineup — and hopefully, you won’t have to — but you want to know about things like her history with the company, her management skills, and style, her experience in the industry, whether she’s been involved in any scandals, and how much company stock she owns (and whether she’s buying or selling it, and why).
Potential investors should also check SEC filings including form DEF 14A or company documents/proxy statements to find out how much the CEO is paid and whether that pay is tied to performance. Executives with compensation that rises with good performance have more incentive to make the company succeed. Are the executives’ interests aligned with shareholders? Compensation can include salary, benefits, bonuses, and stock options. Look to see how your CEO’s compensation compares to others in the same industry.
In Europe, the top-ranking executive officer is often titled Managing Director.
The CEO was replaced during the takeover, even though he had been with the company for twenty years and was responsible for much of its growth
When the company’s business valuation showed a loss in value, the board of directors asked the CEO to explain why the company was no longer profitable.
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This glossary post was last updated: 4th August, 2021 | 14 Views.