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A chief executive officer (CEO) is generally an organization’s highest-ranking executive. The CEO leads management, oversees operations, and implements strategy within authority delegated by the governing board. The board remains responsible for oversight and holds the CEO accountable; the exact division of authority depends on the organization and its governance rules.
What does a chief executive officer do?
The CEO leads the organization’s executive management. Typical responsibilities include managing day-to-day operations and carrying out corporate strategy, but the board and the organization’s governing documents determine which decisions the CEO may make independently.
The OECD’s 2024 Guidelines on Corporate Governance of State-Owned Enterprises describe a CEO, generally, as the enterprise’s highest-ranking executive officer, responsible for managing operations and implementing corporate strategy. That description concerns state-owned enterprises; it is a useful governance explanation, not a universal legal definition for every organization. OECD, 2024 guidelines.
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Generally, the CEO is accountable to the governing board. In a unitary board structure, that is the board of directors. In a two-tier structure, the OECD identifies the supervisory board as the CEO’s accountability body.
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A board may delegate daily management to the CEO, but delegation does not transfer away the board’s responsibility for oversight and organizational performance. The Australian government regulator ORIC explains that directors may delegate day-to-day management while retaining responsibility for the corporation’s performance and holding the CEO accountable for delegated duties. ORIC guidance on CEOs.
How is a CEO different from the chair or the board?
- CEO: Leads executive management and operational execution.
- Chair: Leads the board’s work.
- Board: Provides governance and oversight, sets or approves direction, and holds management accountable.
The chair and CEO roles may be held by separate people or combined, depending on the organization’s governance arrangement. Combining them does not make their responsibilities identical: the board’s oversight and checks-and-balances arrangements remain important. An organization-specific example is the UK Financial Conduct Authority’s Chief Executive, who implements the Board-agreed strategy and leads the organization within authority delegated by the Board. FCA Chief Executive role.
Does every organization have a CEO?
No. Some corporations do not use a CEO title. ORIC notes that titles such as “general manager” or “executive manager” may be used instead, but those titles are not guaranteed equivalents in every jurisdiction or organization.
Does CEO mean owner, founder, or board member?
No. “CEO” identifies an executive role; the title alone does not establish that the person owns or founded the organization or sits on its board. A person may hold more than one role, but the organization’s governance documents and appointment terms determine what those roles entail.
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- Author: Lencioni, Patrick.
- Publisher: Jossey-Bass
- Pages: 160
- Publication Date: 2008
- Edition: 1
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