View source for Social:Chief executive officer

{{Short description|Highest-ranking officer of an organization}}

A '''chief executive officer''' ('''CEO''')<ref name="Lin 2014">{{cite journal|title=CEOs and Presidents|first=Tom C. W. |last=Lin |date=April 23, 2014 |ssrn = 2428371 |journal=UC Davis Law Review}}</ref> (also known as a ''central executive officer'', or just ''chief executive'' (CE), or as ''managing director'' (MD) in the {{wipe|United Kingdom}}) is the highest officer charged with the management of an [[Organization:Organization|organization]]{{snd}} especially a [[Company:Company|company]] or [[Engineering:Nonprofit organization|nonprofit institution]].

CEOs find roles in various organizations, including public and private [[Company:Corporation|corporation]]s, [[Engineering:Nonprofit organization|nonprofit organizations]], and even some government organizations (notably [[Finance:State-owned enterprise|state-owned enterprise]]s). The CEO of a corporation or company typically reports to the [[Organization:Board of directors|board of directors]] and is charged with maximizing the value of the business,<ref name="Lin 2014" /> which may include maximizing the [[Finance:Share price|share price]], [[Finance:Market share|market share]], revenues, or another element. In the nonprofit and government sector, CEOs typically aim at achieving outcomes related to the organization's mission, usually provided by legislation. CEOs are also frequently assigned the role of the main manager of the organization and the highest-ranking officer in the C-suite.<ref>{{cite journal |last1=Westphal |first1=James D. |last2=Zajac |first2=Edward J. |title=Who Shall Govern? CEO/Board Power, Demographic Similarity, and New Director Selection|journal=Administrative Science Quarterly |date=March 1995 |volume=40 |issue=1 |pages=60–83|doi=10.2307/2393700 |jstor=2393700}}</ref>

==Origins==
The term "chief executive officer" is attested as early as 1782, when an ordinance of the Congress of the Confederation of the {{wipe|United States}} used the term to refer to [[Social:Governor|governors]] and other leaders of the executive branches of each of the Thirteen Colonies.<ref>[https://www.rfrajola.com/Resources/1782Act.pdf Journals of Congress] {{webarchive |url=https://web.archive.org/web/20151021140356/https://www.rfrajola.com/Resources/1782Act.pdf |date=21 October 2015 }} Retrieved 30 December 2022</ref> In draft additions to the ''Oxford English Dictionary'' published online in 2011, the ''Dictionary'' says that the use of "CEO" as an acronym for a chief executive officer originated in {{wipe|Australia}}, with the first attestation being in 1914. The first American usage cited is from 1972.<ref>"[https://www.oed.com/view/Entry/25677 C, n.]", ''Oxford English Dictionary Online'' (Oxford: Oxford University Press, 2011), under ''CEO n.''. Accessed 12 November 2022.</ref>

==Responsibilities==
The responsibilities of an organization's CEO are set by the organization's [[Organization:Board of directors|board of directors]] or other authority, depending on the organization's structure. They can be far-reaching or quite limited, and are typically enshrined in a formal delegation of authority regarding [[Social:Business administration|business administration]]. Typically, responsibilities include being an active decision-maker on [[Strategic management|business strategy]] and other key policy issues, [[Philosophy:Leadership|leader]], manager, and executor. The communicator role can involve speaking to the press and to the public, as well as to the organization's management and employees; the decision-making role involves high-level decisions about policy and strategy. The CEO is tasked with implementing the goals, targets and strategic objectives as determined by the board of directors.

As an [[Social:Executive officer|executive officer]] of the company, the CEO reports the status of the business to the board of directors, motivates employees, and drives change within the organization. As a manager, the CEO presides over the organization's day-to-day operations.<ref name="Investopedia">{{cite web |url=http://www.investopedia.com/terms/c/ceo.asp |title=Chief Executive Officer - CEO |work=Investopedia |publisher=Investopedia US, a Division of IAC |access-date=2014-10-23 }}</ref><ref name="BusinessDictionary">{{cite web |url=http://www.businessdictionary.com/definition/Chief-Executive-Officer-CEO.html |title=Chief Executive Officer (CEO) |work=BusinessDictionary.com |publisher=WebFinance Inc. |access-date=October 23, 2014 |archive-date=October 16, 2020 |archive-url=https://web.archive.org/web/20201016172658/http://www.businessdictionary.com/definition/chief-executive-officer-CEO.html |url-status=dead }}</ref><ref>{{cite book|last=Capstone Publishing|title=The Capstone Encyclopaedia of Business|publisher=Capstone Publishing|year=2003|isbn=1-84112-053-7|location=Oxford, U.K|pages=79–80}}<!--| access-date = 2011-05-17 --></ref> The CEO is the person who is ultimately accountable for a company's business decisions, including those in operations, marketing, [[Social:Business development|business development]], finance, [[Social:Human resources|human resources]], etc.

The use of the CEO title is not necessarily limited to describing the owner or the head of a company. For example, the CEO of a political party is often entrusted with fundraising, particularly for election campaigns.

==International use==
In some countries, there is a dual board system with two separate boards, one executive board for the day-to-day business and one supervisory board for control purposes (selected by the shareholders). In these countries, the CEO presides over the executive board and the [[Social:Chairperson|chairperson]] presides over the supervisory board, and these two roles will always be held by different people. This ensures a distinction between [[Social:Management|management]] by the executive board and [[Philosophy:Governance|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 [[Finance:Shareholder|shareholder]]s) is often equivalent to the supervisory board, while the executive board may often be known as the executive committee (the division/subsidiary heads and [[Social:Corporate title|C-level]] officers that report directly to the CEO).

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 [[Finance:Sole proprietorship|sole proprietorship]], an executive officer is the sole proprietor. In the case of a [[Social:Partner (business rank)|partnership]], an executive officer is a managing partner, senior partner, or administrative partner. In the case of a [[Social:Limited liability company|limited liability company]], an executive officer is any member, manager, or officer.

==Related positions==
{{Main|Social:Corporate title}}
Depending on the organization, a CEO may have several subordinate executives to help run the day-to-day administration of the company, each of whom has specific functional responsibilities referred to as senior executives,<ref>{{cite journal |author=Markus Menz |url=http://jom.sagepub.com/content/38/1/45.abstract |title=Menz, M. 2012. Functional Top Management Team Members: A Review, Synthesis, and Research Agenda. Journal of Management, 38(1): 45-80 |journal=Journal of Management |publisher=Jom.sagepub.com |date=2011-10-04 |volume=38 |issue=1 |pages=45–80 |doi=10.1177/0149206311421830 |s2cid=143159987 |access-date=2012-11-28 |archive-date=2016-04-08 |archive-url=https://web.archive.org/web/20160408181510/http://jom.sagepub.com/content/38/1/45.abstract |url-status=dead }}</ref> executive officers or corporate officers. Subordinate executives are given different titles in different organizations, but one common category of subordinate executive, if the CEO is also the president, is the [[Social:Vice president|vice president]] (VP). An organization may have more than one vice president, each tasked with a different area of responsibility (e.g., VP of finance, VP of human resources). Examples of subordinate executive officers who typically report to the CEO include the [[Social:Chief operating officer|chief operating officer]] (COO), [[Social:Chief financial officer|chief financial officer]] (CFO), [[Social:Chief strategy officer|chief strategy officer]] (CSO), and [[Social:Chief business officer|chief business officer]] (CBO). The [[Social:Public relations|public relations]]-focused position of [[Social:Chief reputation officer|chief reputation officer]] is sometimes included as one such subordinate executive officer, but, as suggested by Anthony Johndrow, CEO of Reputation Economy Advisors, it can also be seen as "simply another way to add emphasis to the role of a modern-day CEO – where they are both the external face of, and the driving force behind, an organisation culture".<ref>{{Cite web|url=https://www.financierworldwide.com/rise-of-the-chief-reputation-officer/|title=Rise of the Chief Reputation Officer|website=Financier Worldwide|language=en-US|access-date=2018-12-30}}</ref>

===United States===
In the US, the term chief executive officer is used primarily in business, whereas the term executive director is used primarily in the not-for-profit sector. These terms are generally mutually exclusive and refer to distinct legal duties and responsibilities.{{cn|date=June 2022}}

===United Kingdom===
In the UK, chief executive and chief executive officer are used in local government, where their position in law is described as the "head of paid service",<ref>UK Legislation, [https://www.legislation.gov.uk/ukpga/1989/42/section/4/data.pdf Local Government and Housing Act 1989, section 4], accessed 9 December 2023</ref> and in business and in the charitable sector.<ref>{{cite web|url=http://www.acevo.org.uk/ |title=Association of Chief Executives of Voluntary Organisations |publisher=Acevo.org.uk |date=2012-11-16 |access-date=2012-11-28}}</ref> {{As of | 2013}}, the use of the term [[Finance:Director (business)|director]] for senior charity staff is deprecated to avoid confusion with the legal duties and responsibilities associated with being a charity director or trustee, which are normally non-executive (unpaid) roles. The term '''managing director''' is often used in lieu of chief executive officer.

==Celebrity CEOs==
Business publicists since the days of Edward Bernays (1891–1995) and his client John D. Rockefeller (1839–1937) and even more successfully the corporate publicists for Henry Ford, promoted the concept of the "celebrity CEO". Business journalists have often adopted this approach, which assumes that the corporate achievements, especially in the arena of manufacturing, are produced by uniquely talented individuals, especially the "heroic CEO". In effect, journalists celebrate a CEO who takes distinctive strategic actions. The model is the celebrity in entertainment, sports, and politics – compare the "[[History:Great man theory|great man theory]]". Guthey ''et al.'' argues that "...these individuals are not self-made, but rather are created by a process of widespread media exposure to the point that their actions, personalities, and even private lives function symbolically to represent significant dynamics and tensions prevalent in the contemporary business atmosphere".<ref>Eric Guthey and Timothy Clark, ''Demystifying Business Celebrity'' (2009).</ref> Journalism thereby exaggerates the importance of the CEO and tends to neglect harder-to-describe broader corporate factors. There is little attention to the intricately organized technical bureaucracy that actually does the work. Hubris sets in when the CEO internalizes the celebrity and becomes excessively self-confident in making complex decisions. There may be an emphasis on the sort of decisions that attract the celebrity journalists.<ref>
Mathew L.A. Hayward, Violina P. Rindova, and Timothy G. Pollock. "Believing one's own press: The causes and consequences of CEO celebrity". ''Strategic Management Journal'' 25#7 (2004): 637-653.
</ref>

Research published in 2009 by Ulrike Malmendier and Geoffrey Tate indicates that "firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance".<ref>
{{cite web
 |url= https://eml.berkeley.edu/~ulrike/Papers/SuperstarCEOs_FINAL.pdf
 |title= Superstar CEOs
 |last1= Malmendier
 |first1= Ulrike
 |last2= Tate
 |first2= Geoffrey
 |date= 14 June 2020
 |page= 1
 |access-date= 11 September 2021
 |quote= We find that firms with award-winning CEOs subsequently underperform, in terms both of stock and of operating performance.
 |archive-url= https://web.archive.org/web/20150911203153/https://eml.berkeley.edu/~ulrike/Papers/SuperstarCEOs_FINAL.pdf
 |archive-date= 11 September 2015
 |url-status= live
}}
</ref>

==Criticism==

===Executive compensation===
Executive compensation has been a source of criticism following a dramatic rise in pay relative to the [[Social:Average worker's wage|average worker's wage]]. For example, the relative pay was 20-to-1 in 1965 in the US, but had risen to 376-to-1 by 2000.<ref>{{cite web|url=https://www.forbes.com/sites/shelliekarabell/2018/02/14/executive-compensation-is-out-of-control-what-now/#79da2410431f|title=Executive Compensation Is Out Of Control. What Now?|website={{wipe|Forbes}}|date=14 February 2018|access-date=16 November 2018}}</ref> The relative pay differs around the world, and, in some smaller countries, is still around 20-to-1.<ref>{{cite web|url=https://www.bloombergquint.com/business/ceos-in-u-s-india-earn-the-most-compared-with-average-workers#gs.37kAijc|title=CEOs in U.S., India Earn the Most Compared With Average Workers|date=28 December 2017|access-date=16 November 2018}}</ref> Observers differ as to whether the rise is due to competition for talent or due to lack of control by compensation committees.<ref>{{cite news|url=https://www.washingtonpost.com/opinions/great-men-great-pay-why-ceo-compensation-is-sky-high/2014/06/12/6e49d796-d227-11e3-9e25-188ebe1fa93b_story.html?noredirect=on|title=Great Men, great pay? Why CEO compensation is sky high.|newspaper={{wipe|The Washington Post}}|date=12 June 2014|access-date=16 November 2018}}</ref> In recent years, investors have demanded more say over executive pay.<ref>{{cite news|url=https://www.ft.com/content/f6dff44d-204f-30b7-a164-537f9214095c |archive-url=https://ghostarchive.org/archive/20221210/https://www.ft.com/content/f6dff44d-204f-30b7-a164-537f9214095c |archive-date=2022-12-10 |url-access=subscription |url-status=live|title=European investors beef up stance over high executive pay| newspaper=Financial Times |date=11 November 2018| last1=Mooney | first1=Attracta }}</ref>

===Diversity===
Lack of diversity amongst chief executives has also been a source of criticism.<ref>{{cite web|url=https://www.managers.org.uk/insights/news/2018/november/the-government-must-act-on-ftse-gender-stats-says-cmis-ceo|title='The government must act on ftse gender stats' says cmi's ceo|date=14 November 2018 |website=CMI |access-date=16 November 2018}}</ref> In 2018, 5% of {{wipe|Fortune 500}} CEOs were women.<ref>{{Cite news|url=http://fortune.com/fortune500/list/filtered?ceowoman=true|title=Fortune 500|access-date=16 November 2018 |url-status=dead |archive-url=https://web.archive.org/web/20190122214352/http://fortune.com/fortune500/list/filtered?ceowoman=true |archive-date=Jan 22, 2019 }}</ref> In 2023 the number rose to 10.4% of for Women CEO's of Fortune 500 companies.<ref>{{Cite web |title=Women CEOs run 10.4% of Fortune 500 companies. A quarter of the 52 leaders became CEO in the last year |url=https://fortune.com/2023/06/05/fortune-500-companies-2023-women-10-percent/ |access-date=2023-09-18 |website=Fortune |language=en |date=June 5, 2023 |first1=Emma |last1=Hinchliffe }}</ref> The reasons for this are explained or justified in various ways, and may include biological sex differences, male and female differences in Big Five personality traits and temperament, sex differences in psychology and interests, maternity and career breaks, [[Philosophy:Hypergamy|hypergamy]], [[Philosophy:Phallogocentrism|phallogocentrism]], the existence of [[Organization:Old boy network|old boy network]]s, tradition, and the lack of female role models in that regard.<ref>{{Cite web|url=https://www.businessinsider.com/women-leaders-have-numbers-problem-2018-6|title=A new list of the top CEOs 'for women' is mostly men — and it reflects a wider problem in business|last=Cain|first=Áine|website=Business Insider |date=Jun 19, 2018 |access-date=2019-10-13}}</ref><ref>{{Cite web|url=https://www.fastcompany.com/90400025/these-are-the-reasons-why-we-still-dont-have-many-women-ceos|title=These are the reasons why we (still) don't have many women CEOs |first1=Michael |last1=Holmes |agency=The Conversation |date=2019-09-06|website=Fast Company|language=en-US|access-date=2019-10-13}}</ref><ref>{{cite web|url=https://hiring.monster.com/hr/hr-best-practices/workforce-management/hr-management-skills/women-ceos.aspx|title=It's 2017 – So Why Aren't there More Women CEOs?|date=28 March 2017 |url-status=dead |archive-url=https://web.archive.org/web/20210802023237/https://hiring.monster.com/employer-resources/workforce-management/leadership-management-skills/women-ceos/ |archive-date=Aug 2, 2021 |first1=John |last1=Rossheim |website=Monster for Employers |access-date=16 November 2018}}</ref> Some countries have passed laws mandating boardroom gender quotas.<ref>{{cite news|url=https://www.nytimes.com/2010/01/28/world/europe/28iht-quota.html?pagewanted=all|title=Getting Women Into Boardrooms, by Law|newspaper=The New York Times|date=27 January 2010|access-date=16 November 2018|last1=Clark|first1=Nicola}}</ref> In 2023 Rockefeller Foundation awarded a grant to [[Company:Korn Ferry|Korn Ferry]] to research strategies and then action a plan to help more women to become CEO's.<ref>{{Cite news |last1=Stevenson |first1=Jane Edison |last2=Orr |first2=Evelyn |date=2017-11-08 |title=We Interviewed 57 Female CEOs to Find Out How More Women Can Get to the Top |work=Harvard Business Review |url=https://hbr.org/2017/11/we-interviewed-57-female-ceos-to-find-out-how-more-women-can-get-to-the-top |access-date=2023-09-18 |issn=0017-8012}}</ref>

===Toxic executives===
There are contentious claims that a significant number of CEO's have psychopathic tendencies, often characterized by power-seeking behavior and dominance. These individuals can often conceal their ruthlessness and antisocial behavior behind a facade of charm and eloquence. Traits such as courage and risk-taking, generally considered desirable, are often found alongside these psychopathic tendencies.

Tara Swart, a neuroscientist at MIT Sloan School of Management, has suggested that individuals with psychopathic traits thrive in chaotic environments and are aware that others do not. As a result, they may intentionally create chaos in the workplace.<ref>{{Cite web |last=McCullough |first=Jack |title=The Psychopathic CEO |url=https://www.forbes.com/sites/jackmccullough/2019/12/09/the-psychopathic-ceo/ |date=Dec 9, 2019 |website=Forbes |language=en |url-status=live |archive-url=https://web.archive.org/web/20230820112422/https://www.forbes.com/sites/jackmccullough/2019/12/09/the-psychopathic-ceo/?sh=77f07139791e |archive-date= Aug 20, 2023 }}</ref><ref>{{Cite web |last=Chamorro-Premuzic |first=Tomas |date=Apr 8, 2019 |title=1 in 5 business leaders may have psychopathic tendencies—here's why, according to a psychology professor |url=https://www.cnbc.com/2019/04/08/the-science-behind-why-so-many-successful-millionaires-are-psychopaths-and-why-it-doesnt-have-to-be-a-bad-thing.html |url-status=live |archive-url=https://web.archive.org/web/20231124110414/https://www.cnbc.com/2019/04/08/the-science-behind-why-so-many-successful-millionaires-are-psychopaths-and-why-it-doesnt-have-to-be-a-bad-thing.html |archive-date=Nov 24, 2023 |website=Make It |publisher=CNBC}}</ref>  This perspective is explored in the book ''[[Finance:Snakes in Suits|Snakes in Suits]]'', co-authored by [[Biography:Robert D. Hare|Robert D. Hare]].

However, [[Biography:Scott Lilienfeld|Scott Lilienfeld]] has argued that the attention given to psychopathy in the workplace by both the media and scholars has far exceeded the available scientific evidence. Emilia Bunea, writing in ''Psychology Today'', has linked psychopathic traits in managers to workplace bullying, employee dissatisfaction, and turnover intentions. Despite this, Bunea cautions that excessive worry about supposed psychopathic managers could discourage individuals from pursuing careers in corporations and deter employees from addressing issues with difficult bosses.<ref>{{Cite web |last=Bunea |first=Emilia |date=May 12, 2023 |title=The Truth About Corporate Psychopaths |url=https://www.psychologytoday.com/us/blog/to-manage-is-human/202305/the-truth-about-corporate-psychopaths |url-status=live |archive-url=https://archive.today/20231214210227/https://www.psychologytoday.com/us/blog/to-manage-is-human/202305/the-truth-about-corporate-psychopaths |archive-date=14 Dec 2023 |website=Psychology Today}}</ref>

In a related development, British politician Andy McDonald received praise for educating a CEO on the role of trade unions. This occurred as the restaurant chain [[Company:McDonald's|McDonald's]] faced scrutiny in the UK Parliament over allegations of a toxic workplace culture.<ref>{{Cite web |last=Davenport |first=Hannah |date=2023-11-15 |title=McDonald's CEO gets schooled by MP on the role of trade unions |url=https://leftfootforward.org/2023/11/mcdonalds-ceo-gets-schooled-by-mp-on-the-role-of-trade-unions/ |website=Left Foot Forward |language=en-GB |url-status=live |archive-url=https://web.archive.org/web/20231205201112/https://leftfootforward.org/2023/11/mcdonalds-ceo-gets-schooled-by-mp-on-the-role-of-trade-unions/ |archive-date= Dec 5, 2023 }}</ref>

==See also==
* [[Social:CEO succession|CEO succession]]
* [[Social:CEO of public schools|CEO of public schools]]
* [[Social:City manager|City manager]]
* [[Social:Executive officer|Executive officer]]
* Glass cliff
* List of books written by CEOs
* List of chief executive officers
* [[Software:Occupational Information Network|Occupational Information Network]]
* [[Social:Prime minister|Prime minister]]
* United States Department of Labor

==References==
{{Reflist|30em}}

==Further reading==
* {{cite journal|doi=10.1016/j.jfineco.2012.12.005|url=http://www.usc.edu/schools/business/FBE/seminars/papers/F_10-3-08_KISGEN-Gender.pdf|title=Gender and corporate finance: Are male executives overconfident relative to female executives?|journal=Journal of Financial Economics|volume=108|issue=3|pages=822–839|year=2013|last1=Huang|first1=Jiekun|last2=Kisgen|first2=Darren J.|archive-url=https://web.archive.org/web/20160721204528/http://www.usc.edu/schools/business/FBE/seminars/papers/F_10-3-08_KISGEN-Gender.pdf|archive-date=2016-07-21}}
* {{cite journal|doi=10.1111/j.1540-6261.2012.01739.x|url=http://core.ac.uk/download/pdf/6606747.pdf|title=Which CEO Characteristics and Abilities Matter?|journal=The Journal of Finance|volume=67|issue=3|pages=973–1007|year=2012|last1=Kaplan|first1=Steven N.|last2=Klebanov|first2=Mark M.|last3=Sorensen|first3=Morten}}
* {{cite journal|doi=10.1111/j.1540-6261.1997.tb04820.x|title=A Survey of Corporate Governance|journal=The Journal of Finance|volume=52|issue=2|pages=737–783|year=1997|last1=Shleifer|first1=Andrei|last2=Vishny|first2=Robert W.|s2cid=54538527|url=http://nrs.harvard.edu/urn-3:HUL.InstRepos:30728046}}
* Vancil, Richard F. ''Passing the baton: Managing the process of CEO succession'' (Harvard Business School Press, 1987).

==External links==

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