-9.7 C
New York
Saturday, February 4, 2023

Buy now

CEO Full Form | What is Chief Executive Officer – javatpoint

Chief Executive Officer is the most senior corporate officer or administrator in any organization who looks after overall management and administration.

The CEO of a corporation or company directly reports to the chairman or board of directors. He is responsible to make changes by applying policies and motivating the employees. A lot of hard work, experience, and business networking is needed to become a CEO.

What is the full form of CEO?

The full form of the CEO is the Chief Executive Officer. The CEO indicates the high position in a company or organization and is in charge of the management and administration. CEO is perhaps the most senior administrative or executive officer concerned for running the company as a whole and its revenue. The CEO of the organization directly reports to the Chairman or Board of Directors.

The CEO is responsible for creating changes through the application of policies and encouraging, motivating and inspiring the employees. A great deal of work ethic, experience, and knowledge about business networking is required to be a CEO. In the nonprofit and government divisions, CEOs typically strive to achieve outcomes related to the purpose of the company, such as poverty reduction, increased literacy, etc.

Eligibility criteria

  • There is nothing an identical and comprehensive educational credential required for the role to be the CEO of any company or corporation.
  • The CEO is the leading position in a company or organization picked by a company’s board of directors
  • Much of it is observed that a large number of CEOs have a degree in science, law or engineering.

Key responsibilities of CEO

  • A CEO makes each significant business decision.
  • He provides a stable working and operating environment.
  • He supports, motivates and inspires the employees of the company or enterprise.
  • A CEO is making changes in policy, tactics and business strategy.
  • He leads all the business activities.
  • He assigns the roles and duties to its subofficers
  • The CEO assists with recruiting members of the Council.
  • The CEO advises or recommends a yearly budget, which controls and manages the organization’s capital, intelligently and sensibly.

How One Can Appoint a CEO?

The board of directors elects the CEO of a company. Sometimes, the management appoints a CEO to participate in the operational activities of a company. The following steps are included to appoint a CEO.

  • You will have to prepare a notice for a board meeting that will include the resolution to be passed with the candidate’s name that has to be appointed as a CEO.
  • Then send the Notice with Agenda to all the Directors of the company.
  • In the board meeting pass the Board Resolution.
  • Then send the Outcome of Board Meeting to a Stock exchange within 30 minutes from the conclusion.
  • Issue a letter of appointment to the candidate who you will appoint as a CEO.
  • Then File e-Form MGT-14 and DIR-12 along with attachments with the Registrar of Companies within thirty 30 days from appointment.
  • Send an Appointment letter to the Chief Executive Officer and make an entry in the records of the company.

Educational Qualification to become a CEO

There is not a specific educational qualification to become a CEO of an organization. This is a top most post and being appointed by the board of directors of an organization; but it is seen that most of the CEO’s have a MDA or a technical degree.

CEO Full Form | What is Chief Executive Officer - javatpoint
CEO Full Form | What is Chief Executive Officer – javatpoint

Top 10 CEOs in the World

Here is the list of top 10 CEOs in the world and you can see the company in which they are working as a CEO.

S. NoCEOs NameCompany
1Elon MuskTesla and SpaceX
2Satya NadelleMicrosoft
3Mark ZukerbergFacebook
4Andy Jassy
Amazon
5Tim CookApple
6Jamie DimonJP Morgan Chase
7Arvind KrishnaIBM
8Bernard ArnaultLVMH
9Albert BourlaPfizer
10Amin H.NasserSaudi Aramco

What Is Chief Executive Officer (CEO)?

A chief executive officer (CEO) is the highest-ranking executive in a company. Broadly speaking, a chief executive officer’s primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors and corporate operations. In many cases, the chief executive officer serves as the public face of the company. 

Understanding Chief Executive Officers

A CEO’s role varies from one company to another depending on the company’s size, culture, and corporate structure. In large corporations, CEOs typically deal only with very high-level strategic decisions and those that direct the company’s overall growth. For example, CEOs may work on strategy, organization, and culture. Specifically, they may look at how capital is allocated across the firm, or how to build teams to succeed. 

In smaller companies, CEOs often are more hands-on and involved with day-to-day functions. 

One study from Harvard Business review analyzed how CEOs spend their time. They found that 72% of CEOs’ time was spent in meetings versus 28% alone. Moreover, 25% was spent on relationships, 25% on business unit review and functional reviews, 21% on strategy, and 16% on culture and organization. Some food for thought: the study showed that just 1% of time was spent on crisis management and 3% was allocated to customer relations

CEO Pay and Notoriety

On average, CEOs of the 350 largest companies in the U.S. have earned $24 million in annual salaries. To look at it another way, that’s 351 times the salary of a worker. Since the 1970s, CEO pay is estimated to have skyrocketed over 1,300%. By contrast, worker compensation has grown 18%.2 

Because of their frequent dealings with the public, sometimes the chief executive officers of large corporations achieve fame. As of Feb. 9, 2022, Elon Musk, founder of Tesla (TSLA) has over 73 million followers on Twitter.3 Similarly, Steve Jobs, founder and CEO of Apple (AAPL), became such a global icon that following his death in 2011, an explosion of both cinematic and documentary films about him emerged.

Related Chief Positions

Corporate America houses numerous titles of senior executives that begin with the letter C, for “chief.” This group of top senior staffers has come to be called C-suite, or C-level in the corporate vernacular.

It’s worth noting that for small organizations or those that are still in the startup or growth phases, for example, the CEO may also be serving as the CFO and the chief operating officer (COO), and so on. This can lead to a lack of clarity, not to mention an overworked executive. Assigning multiple titles to a single executive-level individual can wreak havoc on a business’s continuity and ultimately may affect its long-term profitability negatively. In short, when it comes to executive-level positions within an organization, assigned titles and the functions associated with each can become muddled quickly. 

What are the key differences between roles in the C-suite?

The Difference Between CEO and COB

The CEO directs the operational aspects of a company. Comparatively, the board of directors—led by the chair of the board (COB)—oversees the company as a whole. While the chair of the board does not have the power to overrule the board, the board has the power to overrule the CEO’s decisions. Effectively, the chair is considered a peer with the other board members. In some cases, the CEO and the chair of the board can be the same person, but many companies split these roles between two people.

The Difference Between CEO and CFO

The CFO is the chief financial officer of a company. While CEOs manage general operations, CFOs focus specifically on financial matters. A CFO analyzes a company’s financial strengths and makes recommendations to improve financial weaknesses. The CFO also tracks cash flow and oversees a company’s financial planning, such as investments and capital structures. Like CEOs, the CFO seeks to deliver returns to shareholders through focusing on financial discipline and driving margin and revenue growth.

The Difference Between CEO and COO

Often, the chief operating officer (COO) is ranked second highest after the CEO. As the head of human resources, their responsibilities fall on recruitment, legal, payroll, and training along with administrative duties. 

The Impact of a CEO Change

During CEO transitions, markets can respond either positively or negatively to the change in company leadership. That makes sense, as studies show that CEOs may have a large impact on a company’s performance. For instance, one study found that 45% of company performance is influenced by the CEO.4 But on the flip side, another shows that CEOs affect just 15% of variance in profitability.5 

When a new CEO takes over a company, the price of its stock could change for any number of reasons. However, there is no positive correlation between a stock’s performance and the announcement of a new CEO, per se.

However, a change in CEO generally carries more downside risk than upside, particularly when it has not been planned. A stock’s price could swing up or down based on the market’s perception of the new CEO’s ability to lead the company, for example. Other factors to consider when investing in a stock that’s undergoing a management change include the incoming CEO’s agenda; whether there might be a shift in corporate strategy for the worse; and how well the company’s C-suite is managing the transition phase.

Investors tend to be more comfortable with new CEOs who are already familiar with the dynamics of the company’s industry, and the specific challenges that the company may be facing. Typically, investors will assess a new CEO’s track record for creating shareholder value. A CEO’s reputation could be reflected in areas like an ability to grow market share, reduce costs, or expand into new markets.

What Does the CEO Do?

CEOs are responsible for managing a company’s overall operations. This may include delegating and directing agendas, driving profitability, managing company organizational structure, strategy, and communicating with the board.

Does CEO Mean They Are the Owner of a Company?

It depends. In some cases, CEOs are the owners of a company. In others, CEOs are elected by the board of directors.

Is CEO or CFO Higher?

CEO is the highest position to occupy in a company. The CFO, who is responsible for the financial discipline of a company along with identifying the strengths and weaknesses of a company, ultimately reports to the CEO.

SPONSORED

Open a Live Account in Under 5 Minutes

Open a trading account in under 5 minutes and join 900,000 others globally trading long or shot on US, AU, UK and EU Share CFDs, and access 300+ other CFD products over assets like indices, gold, and forex with an award-winning broker. Trade from $6 commission a side, and access free education and trading tools with 24/5 phone support. Learn more about trading with Vantage and get started today.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest Articles