CEO vs Executive Director
The organizational structures of various companies are laid out in many different ways.
The structure could be a vertical hierarchy chain of commands or a horizontal web structure depending upon the company profile and the products that it is offers.
However, irrespective of the organizational structure, there are certain rules laid down by the regulatory boards of various markets and central banking institutions of various economies to protect the interests of the different stakeholders in a company, such as the shareholders, debtors and the like.
International standards have been agreed according to which a Limited Company, employing the money of the market be structured as a 4 tier system. According to the generally accepted standards, the Board of directors forms the top rung of a company structure. This board is succeeded by a Chief Executive Officer (CEO), who is the leader of the pack down the line. He is the general manager of all the general managers plus some more.
The third level is the level of general managers, who have autonomy in their respective departments. The activities of a company are divided in terms of departments.
The various finished products are then, joined to form one core product, which the company represents. The last ladder comprises the managers, who are in direct contact with the ‘field’.
The CEO is in charge of the entire production process that starts with him then down under, right from production, to quality control, to processes, to recruitment, to marketing, to sale, to profit, and even to building a future policy of the company.
The CEO is supervised by a board of directors, who represent the stakeholders of the company. The communication line between a CEO and the board of directors is the Company Secretary, who briefs the board about the working of the CEO.
The board is led by the Executive Director (ED), or the Managing Director. The responsibilities of the Board, led by the Executive director, involve calling and managing the Annual general meeting of the Shareholders, endorse the policies of the CEOs. If the Executive director does not, then he may be replaced and the funds for the company be arranged. The executive director acts as the chief whip leading the opinion of the entire board, and the CEO, is his blue-eyed boy.
For a company to succeed, it is necessary that both ED and the CEO work in rhythm. In summary:
1. The Executive Director heads the Board of Directors.
2. The CEO is superseded by the Board of Directors.
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can a company have a ceo and md at the same time? thank you!
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Yes. Infosys has same CEO and MD – Mr. S.D. Shibulal.
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Can anyone tell me whose power is big whether the executive director of the company or the chief executive officer (CEO) of company.
Who can force the executive director to resign ?? Does CEO has this power…??
Who is the boss in both of them??
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Can anyone tell me whose power is big whether the executive director of the company or the chief executive officer (CEO) of company.Who is the boss??
Who can force the executive director to resign ?? Does CEO has this power…??
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Amrit
” For a company to succeed, it is necessary that both ED and the CEO work in rhythm. In summary:
1. The Executive Director heads the Board of Directors.
2. The CEO is superseded by the Board of Directors. ”
This indicates that the Executive Director and/or Board of Directors can fire the CEO. To fire a Executive Director, the Board of Directors needs to step in and call for a vote to vote him out.
i hope this helps
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I want to fire my secretary in my corporation, there is no board of directors, he is running my company to the ground and putting the company in debt and doing illegal transactions with the taxes- always chatting and on Facebook. how can I fire him. I have a small corp worth 100k, he is here because he brought me customers and now wants to live off of them.
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‘The CEO is superseded by a board of directors…’
Don’t you mean, supervised?
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Why does this article specify that a person in a position of management is a ‘he’. How sexist, discriminatory and outdated!
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Hi Clara,
I do agree with you. It is sexist how do you name these people who make mindless allusion to colour …and I quote ‘…He is the blue-eyed boy’. An offence to men who don’t necessarily like to be treated as children and a blatant racial assumption.
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can someone pls help me on how the BOD and or E.D fire the CEO in a situation where the CEO is the owner of the company.
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Need more clarity in reply
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