The board chairperson typically holds more power than the CEO.
Here's a breakdown of why:
The CEO, while the highest-ranking executive within a company, ultimately reports to the board of directors. The board chairperson leads the board of directors. This structure provides a system of checks and balances.
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Authority & Oversight: The board, led by the chairperson, is responsible for overseeing the CEO's performance and ensuring the company operates in the best interests of its shareholders. This oversight includes the power to hire, fire, and set the compensation for the CEO.
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Strategic Direction: While the CEO is responsible for the day-to-day operations and execution of strategy, the board, especially through the chairperson, approves and guides the overall strategic direction of the company.
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Approval of Significant Decisions: As indicated in the reference, the CEO needs the board chairperson's approval for significant moves. This illustrates the board chairperson's control over crucial company actions.
While the relationship between the CEO and the board chairperson is often collaborative and based on mutual respect, the board chairperson has the ultimate authority. They can, and sometimes do, overrule the CEO, especially when strategic disagreements or performance issues arise. The reference notes that the two often "co-lead," but this collaborative aspect doesn't negate the chairperson's ultimate authority.
