chief evecutive officer
President of the company
general manager
From high to low
For enterprises in today's era, the market is changing, and the speed of decision-making and the intensity of implementation are more important than ever. The traditional corporate system of board decision-making and manager execution has been difficult to meet the needs of decision-making. Moreover, with the business expansion of some of our large enterprises, the information exchange within enterprises is getting busier and busier, and the delay in information transmission and communication barriers between decision-making layers and executive layers, as well as the increase in decision-making costs, have seriously affected managers' ability to respond quickly and implement major decisions of enterprises. To solve this problem, we must first give managers more power to make decisions independently, and let managers fight for their own decisions and be responsible for their actions. CEO is the product of this change. CEO (Chief Executive Officer) is the product of corporate governance reform and innovation in the United States in the 1960s. In a sense, its appearance represents the transition of some decision-making power from the original board of directors to the management. In China, the concept of CEO first appeared in some network enterprises. There, the CEO is often self-appointed, and few people have studied what this title means to the enterprise. However, when the voice of CEO is getting louder and louder in China, we should realize that the change of the title of senior staff is not a trivial matter, and the establishment of CEO position should not be just a fashion catch-up.
What is the difference between CEO and general manager? Formally, CEO and general manager are the top leaders of enterprises. The CEO is both the highest executive and the spokesman of shareholders' rights and interests-in most cases, the CEO appears as a member of the board of directors, and the general manager is not necessarily a member of the board of directors. In this sense, the CEO represents the enterprise and bears the basic responsibility for its operation. In foreign countries, the authority of CEO is more absolute than that of domestic general manager, because there is no similar supervision and constraints from all directions, but they will never get involved in the specific affairs of the company like the general manager. After the CEO makes the overall decision, the specific execution will be decentralized. So some people say that CEO is like 50% chairman and 50% general manager in China. On the other hand, there is such an enterprise in China. In the process of its development, a specific entrepreneur has played a very important role, and his personal prestige has formed a strong influence in the enterprise. In this case, no matter what his title is, he will always be the de facto leader of the enterprise, doing what the CEO wants to do. From this perspective, compared with such general managers and presidents, the CEO has no change in authority.
Are CEO and chairman divided or combined? The chairman is the leader of the company's board of directors, and his duties are of the nature of organization, coordination and representation. The power of the chairman belongs to the responsibility of the board of directors. He doesn't manage the specific business of the company and generally doesn't make personal decisions. He only enjoys the same voting rights as other directors when the board of directors meets or special committees of the board of directors meet. The CEO is appointed by the board of directors and is the executive leader of the company. In order to solve the problem that the decision-making and supervision of the board of directors may be out of line with the decision-making and implementation of the CEO, the chairman of the board of directors is generally the CEO in the United States. In the United States, 75% of companies have the same CEO and chairman. At the same time, the CEO is usually the chairman of the executive Committee and acts on behalf of the board of directors when it is not in session. But there are exceptions The chairman and CEO of Citigroup are the same person, and the chairman of the executive Committee is another important person. In other countries, the functions of CEO and chairman are separated. The chairmen (presidents) in Britain and Japan are mostly retired company presidents or external celebrities. They are non-executive directors, just conveners of the board of directors and representatives of the company's external image. Their influence on the company's decision-making process is limited, and their main responsibilities are to supervise managers and maintain the relationship between the company and society, government and business circles.
What exactly does a CEO do? The establishment of CEO reflects the further concentration of the company's management rights. Since the CEO is produced as the agent of the company's board of directors, it is up to the boards of directors of each company to decide what kind of power, how much power and under what circumstances to grant him. Generally speaking, the CEO's main responsibilities include three aspects: (1) making decisions on all major affairs and personnel appointment and removal of the company. After decision-making, the power is delegated to the specific supervisor, and the CEO has less specific intervention. (2) Create a corporate culture. The CEO should not only formulate the company's major policies, but also create a corporate culture that encourages employees to be willing to serve the company. (3) Promote the overall image of the company. Another important duty of CEO is to promote corporate image, which may be aimed at investors, existing and potential customers, creditors and other stakeholders of the company. It may be a product to be promoted, including corporate culture, leadership and so on. A good CEO will always be the number one thought leader of the company. They take care of the overall situation and take the lead in formulating a grand vision. Who is the CEO of Chinese enterprises? In fact, between the chairman and the general manager, it is not easy to see who is the real CEO of China Company, or who is the real CEO. Relevant research shows that: (1) When the chairman is also the general manager, this person is the CEO. This situation is similar to that of the chairman and CEO of the United States, and the chairman and general manager of listed companies in China account for 20.9%. The decision-making power and execution power of such companies are highly integrated. (2) If the chairman is not the general manager and does not work in the company every day, the general manager can also be regarded as the CEO. This situation is similar to the separation of chairman and CEO in the United States. The decision-making power and execution power of such companies are relatively separated, which is the case for 34.3% listed companies in China. (3) Between the above two, the chairman is not the general manager but works in the company every day. We think that in this case, both the chairman and the general manager have the functions of CEO, which is similar to the phenomenon of double CEO that often appears in the running-in period after the merger of two foreign companies. As for the actual operation, who has more power, the chairman or the general manager, depends on the actual situation. Generally speaking, the chairman may be stronger and the general manager is weaker, which is the case in 44.8% listed companies in China. There are also legal reasons for this result. The Company Law stipulates that the chairman is the legal representative, and the chairman has the right to represent part of the duties of the board of directors when the board of directors is not in session-instead of acting as the executive committee of the board of directors when the board of directors is not in session. If you work in the company every day, the chairman must participate in the implementation activities. Therefore, under the CEO system, whether the chairman and CEO are concurrently held by the same person depends on the specific situation of each company, and it is more critical to establish a board governance mechanism and structure suitable for the CEO system. What is the board of directors under the CEO system? The final clarification and improvement of the governance structure of the board of directors requires professional skills, that is, to clarify the responsibilities of directors and refine the internal division of labor and power checks and balances. The governance structure requires professional skills, which must be best implemented through the committees at the board level. Therefore, in some European and American countries, there are usually some professional committees in the board of directors, which are responsible for coordinating the board of directors to do a good job. Typical committees include: Executive Committee, Audit Committee, Remuneration Committee, Nomination Committee, etc. Among them, audit committee, remuneration committee and nomination committee are necessary for listed companies in Britain and America. The members of these committees are mainly composed of external directors and independent directors, who are responsible to the board of directors and can work independently. (1) Executive Committee. It is usually composed of CEO and other executive directors (including non-director senior managers) and is the core of the company's top management. As the permanent body of the board of directors, it exercises the board's power when the board is not in session. The CEO is the chairman of the Committee. The Executive Committee may meet once a week, and its main task is to decide and review the company's policies, and make coordination provisions for a large number of daily work and activities. (2) Audit Committee. Its main responsibilities are stipulated in the company's articles of association, such as recommending the company's external audit institutions; Check the cost, work cycle and independence of external audit; Check the appointment and replacement of senior auditors within the company; Review the company's annual financial statements and the differences of opinions between management and external auditors when preparing these financial statements; Seek the opinions of external auditors and senior internal auditors, and pay attention to whether the financial control of the company is appropriate. (3) Remuneration Committee. Study the remuneration of directors and senior managers of the company (fixed remuneration and shareholding plan, etc.). ) and submit the salary plan to the board of directors. The remuneration committee is basically composed of external directors. (4) Nomination Committee. Responsible for submitting the list of directors and re-election candidates to the shareholders' meeting every year. And is responsible for finding and proposing a successor to the CEO and submitting it to the board of directors for consideration. The nomination committee is usually composed of external directors. What does the board of directors do under the CEO system? Under the CEO management system, the board of directors has become a small board. The board of directors no longer makes decisions on major business decisions. Its main function is to select and evaluate managers and formulate a CEO-centered management incentive system. On the other hand, although the CEO has absolute power over other executives, this power is also greatly limited. The CEO should be supervised and restricted by the board of directors representing the interests of investors, and the relationship between CEO and board of directors is similar to that of presidents and parliaments in western countries. (Attachment: The responsibilities of the board of directors under the CEO system are 1. Exercise supervisory functions: nominate the CEO, approve the CEO and other managers, provide the CEO with necessary working conditions, ensure the manager's ability, evaluate the manager's performance, determine his new salary, continuously audit and supervise the manager, formulate the company's articles of association, and design and modify the policy objectives to be implemented by the manager. 2. Ensure compliance with legal provisions: be familiar with the new legal provisions, ensure that the company complies with every relevant legal provision, evade legal provisions unfavorable to the company through proper means, nominate new directors, and authorize the issuance of new shares and corporate bonds through the capital budget. 3. Protect the interests of stakeholders: supervise product quality, strive to improve employees' working conditions, check labor policies and practices, improve the company's visibility among customers, maintain the company's good corporate image, and keep close contact with government agencies, educational and scientific research institutions and non-governmental organizations. 4. Serve the interests of shareholders: protect shareholders' equity income, promote the preservation and appreciation of the company's assets, stop the dilution of shares, ensure that shareholders have equal opportunities when choosing representatives, inform shareholders of the company's business information through letters, announcements and other forms, announce appropriate dividends, and ensure the company's survival. The important embodiment of CEO's supervision and restriction by the board of directors is that when the CEO of a company can't perform his business functions well and lead the development of the enterprise, the board of directors can effectively replace him. This is also a healthy and flexible corporate governance structure must have the ability. For China, CEO is a new thing, and its development time is still very short. Therefore, we should first learn from the international market and choose and appoint a CEO suitable for our own enterprise in combination with the actual situation in China. And gradually establish a board governance mechanism and structure suitable for CEO system to meet the needs of rapid development and internationalization.