The Role of Chief Executive Officer - PDF

Added on - 30 May 2021

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INTRODUCTIONA chief executive officer (CEO) is the uppermost ranking supervisor of an organizationwhose main task is to take crucial business decisions, supervising the general manoeuvres,functions and capital of the corporation and behaving as the chief point of contact betweenthe board of directors and corporate operational sections. Their role differs from company tocompany depending upon the size and overall structure of the organisation.The CEO is construed to be one of the most popular positions and at the same time leastcomprehended job as generally there is a notion within people that a CEO has the power todo whatever he/she wishes to, have all the powers in this world, and are automaticallyproficient. Thus by its nature, the work of a CEO is very wide, covering and addressing to therequirements of employees, customers, investors and the legal side as well. Thus due to thevast arena of work, their powers are also huge. CEO’s are not the owners of the company,they are also employees only, thus even though they possess vast powers yet their powersseem to be limited at some instances. The said debate would discuss about what powers dothe CEOs actually possess and how much are fiduciary by nature as they also are ultimatelythe employees of the company reporting to the board of directors and the promoters of thecompany.POWERS THAT CEO ACTUALLY POSSESS- ACADEMIC PERSPECTIVEIt is believed that although the CEO reports to the board of directors of the company, yet he isthe one who is deeply involved into the day to day operations of the company, thereby has thepower to take adequate decisions in the best of the interest of the company internally and tosome extent, externally as well depending upon the power delegated to him by the board.CEOs do not possess the power to state policies on behalf of the company, but definitely hasthe power to make decisions which would aid towards confirming to the policies spelt out bythe board, thereby confirming that CEO does possess huge amount of powers else it would bedifficult to go back to the board for each decision it takes.Thus their powers are basically related towards making crucial decisions regarding theoperational functions of the entity and set the company policies. Thus until and unless thecompany does not face any kind of a critical issue which may have an impact over itsstability, the CEO has been empowered with the rights to make decisions as he thinks is the
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