Introduction

To counter and contain a dominant CEO, who may block or unduly influence CEO succession planning, or even to establish proper delegation of authority more generally, a Position Description for the CEO is used by many boards so there is clarity on roles and responsibilities.

This Position Description for the CEO, along with a Position Description for a Board Chair, for Committee Chairs, and for Individual Directors, also establishes the dividing line between governance and management. And, similar to undue influence by a CEO, these other Position Descriptions (see later Appendices) address undue influence (e.g., micro-managing, usurping of authority, over-reliance on one person) by a Chair or a Director.

For public companies, Canada has a requirement for such the foregoing sets of Position Descriptions. (The editor advised on the foregoing in 2005. The United States does not.) Other companies, including not-for-profit and state-owned organizations, are adopting similar position descriptions.

The person who drafts the position description should not be a member of management, or an advisor to management, including law firms who serve management. The incumbent CEO should have an opportunity to review a draft position description and suggest any changes to the governance and nominating committee for their review. The board should review and approve the CEO's position description, and it should be amended from time to time to reflect governance changes and the circumstances of the company.

To assist boards in developing roles and responsibilities for the CEO, the following model terms of reference were developed by the editor:

Chief Executive Officer Position Description

The Chief Executive Officer (CEO) (or Managing Director for a not-for-profit organization) provides effective leadership and vision for the Company. The CEO sets the “tone” for Management to foster ethical and responsible decision-making, effective management, and best-in-class corporate governance practices.

The CEO of the Company will:

1. Provide leadership and vision to manage the Company in the best interests of the organization, including its Shareholders (or Members) and other Stakeholders.
2. Provide leadership in setting and achieving the Values, Vision, Mission, Strategic Plan, and Annual Operating Plan of the Company, in conjunction with the Board of Directors (Board).
3. Achieve the Strategic Plan of the Company in a reliable, quality, safe, and ethical manner through resourceful people, capitalizing on superior personnel and other assets and operating in a socially responsible manner.
4. Be a community leader, and ensure that the Company makes and keeps appropriate commitments to the well-being and improvement of the communities in which it operates.
5. Serve as the external spokesperson and principal liaison for the Company, including effectively managing relations with the Company's external stakeholders, including customers, creditors, donors (as the case may be), suppliers, communities in which the Company operates, the media, and the public generally.
6. Be responsible for communicating the Company's Values, Vision, and Mission to external stakeholders.
7. Provide leadership to Management in support of the Company's commitment to corporate social responsibility.
8. Foster ethical and responsible decision-making by Management.
9. Set the ethical tone for the Company and its Management, including (i) overseeing the administration and implementation of, and compliance with, the Company's policies and procedures; (ii) taking all reasonable steps to satisfy the Board as to the integrity of the CEO and other senior officers; and, (iii) taking all reasonable steps to satisfy the Board that the CEO and other senior officers create a culture of integrity throughout the organization.
10. Provide the Company Director Code of Conduct to the Audit Committee and the Board for approval.
11. Comply with the Company Code of Ethics and the Company Director Code of Conduct.
12. Communicate in a timely fashion with the Board on material matters affecting the Company.
13. Communicate regularly with the Board Chair and other Directors to ensure that their responsibilities are being fully complied with, and that Directors are being provided with information necessary to fulfill their responsibilities and statutory obligations.
14. Assist the Nominating and Governance Committee Chair and Corporate Secretary in developing the Board, Board Committee and Individual Director Guidelines, Charters and Position Description.
15. Assist the Nominating and Governance Committee Chair and Corporate Secretary in developing an orientation program for new Directors and a continuing education program for incumbent Directors.
16. With the Audit Committee, the Chief Financial Officer, and other members of Management, as needed, ensure appropriate, accurate, and timely disclosure of material information.
17. Ensure the development of a Strategic Plan for the Company to fulfill its Mission and Vision, recommend it to the Board for review, and, in the Board's discretion, approval.
18. Ensure the implementation of the Strategic Plan and report to the Board in a timely manner on progress regarding or deviations from the Strategic Plan or any parameters established by the Board.
19. Provide general supervision and management of the day-to-day affairs of the Company within the guidelines established by the Board, consistent with decisions requiring prior approval of the Board, and the Board's expectations of Management.
20. Ensure the development of an Annual Operating Plan including business plans, operational requirements, organizational structure, staffing and budgets that support the Strategic Plan, and recommend the Annual Operating Plan to the Board for review, and, in the Board's discretion, approval.
21. Ensure the implementation of the Annual Operating Plan, and direct and monitor the activities and resources of the Company, consistent with the strategic direction, financial limits and operating objectives approved by the Board.
22. Approve commitments within the limits of delegated approval authorities.
23. Provide the Board assurance that the proper systems are in place to identify and manage principal financial and nonfinancial risks, and that such risks are acceptable to the Company and are within the guidelines established by the Audit Committee, the Human Resources and Compensation Committee, the Nominating and Governance Committee, any other Committee, and the Board.
24. Ensure the accuracy, completeness, integrity, and appropriate disclosure of the Company's financial statements and other financial and nonfinancial information through appropriate policies and procedures.
25. Establish and maintain the Company's internal control over financial reporting through appropriate policies and procedures.
26. Ensure that the Company has complied with all regulatory requirements for the Company's financial and nonfinancial information, reporting, disclosure requirements, and internal controls over reporting and principal risks.
27. Provide applicable required regulatory assurance regarding the Company and its activities.
28. Ensure appropriate policies and procedures of the Company are developed, maintained, and disclosed.
29. Develop an effective organization with the right people in the right positions.
30. With the Human Resources and Compensation Committee and the Board, ensure that the Company has an effective senior Management team below the level of the CEO, the Board has regular exposure to senior Management team members, and all reasonable steps are taken to support an effective plan of emergency and permanent succession and development for the CEO and senior Management.
31. Recommend appointments to senior Management, monitor performance of senior Management, and provide feedback and training as appropriate.
32. With the Nominating and Governance Committee, the Corporate Secretary and the Board, participate in developing the CEO Position Description.
33. With the Human Resources and Management Committee and the Board, participate in developing annual CEO personal and corporate goals and objectives aligned with the Company's Values, Vision, Mission, Strategic Plan, and Annual Operating Plan, as well as indicators to measure the CEO performance, and present them to the Board for review, and in the Board's discretion, approval.
34. Ensure that an annual evaluation of CEO performance is conducted by the Human Resources and Compensation Committee and the Board.
35. Carry out any other appropriate duties and responsibilities assigned by the Board.
36. To honor the spirit and intent of applicable law as it evolves, the authority to make minor technical amendments to this Position Description is delegated to the Corporate Secretary, who will report any amendments to the Nominating and Governance Committee at its next meeting.
37. Once or more annually, as the Nominating and Governance Committee decides, this Position Description will be fully evaluated and updates recommended to the Board for consideration.