The paper "The Role of a Board Chairman and a CEO" is an outstanding example of management coursework. Corporate governance is a regulatory mechanism that outlines the roles and relationship between an organization’ s management. A company’ s board encompasses the board of director’ s shareholders, management and other key stakeholders involved. Over the years, corporate governance transformation is evident through the forms of business leadership. Corporate governance seeks to mitigate any agency risk emanating from the respective corporation's officers. In the contemporary forms of business, corporate governance seeks to provide policies that will negate conflicts among the corporation’ s stakeholders (Tricker 2012).
Currently, there exists a wide disparity in the practices observed by corporations all over the world. For instance, in the United Kingdom, the chief executive officer is different from the board of directors. On the other hand, in the United States of America, the chief executive officer also happens to be the chairman of the board of directors. In some countries, this is acceptable while, in others, this practice contravenes the policies governing corporations. According to some lawmakers, combining the duties of a chief executive officer and those of a chairman of the board of directors is detrimental (Kelly 2008).
This is because; at some point, there arises perceived conflict of interest which fundamentally undermines the performance of the individual. It is necessary to define the roles and duties of a person in either capacity. Once this is achievable, it will be visible as to whether combining the two positions is a good idea. The intention of this discussion is to demonstrate the roles of a chairman of the board of directors and those of the chief executive officer. In some countries, for instance, the United Kingdom, the chief executive officer has separate duties with the board of director’ s chair.
For instance, Andy Washington the managing director of Expedia clearly depicts the need for a serration of authority. The duties and responsibilities conferred to the chief executive officer include the following; A chief executive officer is usually the highest-ranking officer in a corporate setting. The chief executive officer is usually in charge of total management of an organization. In the contemporary business framework, the chief executive officer of an organization reports to the board of directors (Rutter 1999).
The chief executive officer is commonly known as the managing director or the chief executive. The board of directors has the responsibility to appoint the chief executive officer depending on a corporation’ s legal framework. The chief executive officer in any organization has the authority to coordinate, make decisions, lead as well as executes various duties. In addition, the chief executive officer acts as the organization's communicator. This implies that the chief executive officer has the authority to disseminate relevant information to the concern quarters.
Unless appropriate delegation is in place, the chief executive officer has the responsibility to involve the press or the entire outside world together with other organizational stakeholders. The decision-making capacity enshrines policy and strategy formulation to spearhead the organization’ s well being. As a leader or a front runner, the chief executive officer has the authority to inform the board directors, foster organizational change as well as stimulate the employees. The managing director has the authority to preside over the recurring operations as well as formulating the strategic plans covering a longer time frame.
In essence, the managing director has the authority to oversee the day to day operations of the organization. The chief executive officer more often than not reports to the board of directors which is also the appointing authority (Maassen 1999).
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