CEO Vs. Board of Directors

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A board of directors broadly oversees a company's or organizations activities. The company's chief executive officer (CEO) reports to the board of directors and acts as a liaison between the company and the board.

Types

  • There are corporate CEOs, entrepreneurial CEOs and CEOs for medium-size companies. A board of directors also is known as a board of trustees or an executive board.

Function

  • The CEO has high-level responsibilities over all the management activities of a company. Some of the functions of the board of directors include approving the annual budget and dealing with stakeholders.

Features

  • Members of the board of directors are elected or appointed, and their activities are determined by a company's bylaws. CEOs are appointed by the board of directors. The board also reviews a CEO's job performance.

Benefits

  • A CEO is the face of a company or organization and takes the hit or pat on the back if a company fails or succeeds. The board of directors is there to steer a company in the right direction.

Considerations

  • In July 2002, Congress passed the Sarbanes-Oxley Act, which sets strong accountability standards for U.S. company boards of directors for companies on the U.S. stock exchanges.

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