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The CEO is then required to take responsibility for the day-to-day operations and management of the organisation. Consequently, the success or otherwise of a company hinges to a large extent on choosing the right CEO.
This responsibility is squarely that of the Board, as is picking the right replacement for a departing CEO. The CEO is responsible for ensuring that the Board is provided with adequate and accurate information in a timely fashion with respect to corporate performance, risk and other exposures and all such information as shall enable the Board effectively fulfil its governance responsibilities.
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The CEO is expected to take the initiative with respect to the reporting format and content, however the Board is at liberty to provide guidance in this regard. Sharing accurate information freely with the Board even where it is not good news is a sure way of wining and sustaining the trust and confidence of the Board.
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Without a doubt, the CEO has to take the lead role and is fully responsible for advancing the success of the enterprise. In this regard, the CEO is expected to remain up-to-date with economic, socio-political and industry developments and trends, locally and internationally.
The Code recommends that the powers and responsibilities of the CEO and the relationship between him and the Board should be clearly set out in a contract of employment. To develop a collaborative relationship with the Board, the CEO should meet and consult with the Board Chairman periodically.
Due care should however be taken not to side-line the other Directors or give the impression that Board meetings are a mere formality to ratify decisions taken outside the Boardroom.
Tim Cook doesn’t seem to understand that good programmers have to learn English
The CEO is expected to establish a culture of integrity, conformance and performance which should be assimilated by personnel at all levels of the Company. Hiring, firing and compensation decisions should be guided by the organizational values.
Given the looming and larger than life persona of the CEO and to ensure the autonomy and independence of the respective Board Committees the Code recommends thatthe CEO shall not be a member of the Committees responsible for remuneration, audit, or nomination and governance.
The CEO is expected to promote and protect corporate interest.
Texas Instruments CEO resigns on code of conduct violation - Reuters
Accordingly, the interest of the Company shall always be paramount and where there is a conflict, the CEO shall disclose such conflict. Clearly, mere disclosure and recusal will not always cure a conflict and in such instances, the Board shall take that decision which is in the best interest of the enterprise.
The Code requires the CEO to declare any conflict of interest on appointment and annually thereafter. As a general rule, the CEO shall not go on to become Chairman. Clearly, the CEO plays a fundamental role in the overall operations of the company and is expected to display exemplary leadership.
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