How chief executive is he appointed
1. Introduction:
The board of directors appoints one of its directors as the executive chief. this whole-time executive is called the chief executive or the managing director of the company. he performs dual functions. he is a director and chief executive of the company as a director he shares the responsibilities of the board and as the chief executive runs the management of the company by the policies approved by the board of directors of the company.
2. Definition:
Under Companies Ordinance 1984 "an individual who subject to the control and directions of the directors is extricated with the whole, or substantially the whole of the powers of the management of the affairs of the company and include a director or any other person occupying the position of a chief executive by whatever name called and whether under a contract of service or otherwise."
3. Appointment of chief executive:
I. Appointment of first chief executive:
The first chief executive of the company is appointed from the date it commences business or within 15 days of incorporation of the business of the company. he heads the office of the company up to the first annual meeting of the company unless he resigns or other ceases to his office.
II. Appointment of subsequent chief executive:
The subsequent chief executive is appointed by the director either out of the elected directors or any person from outside as the chief executive of the company.
4. Term of office:
The chief executive is appointed for a term of 3 years.
5. Re-appointment:
The chief executive is eligible for re-appointment.
6. The chief executive continues to perform his functions:
The chief executive retires after the completion of his term 3 years and continues to perform his functions until his successor is appointed.
7. Terms and conditions of appointment:
The terms and conditions of the appointment of a chief executive are determined by the directors or the company in the general meeting by the provisions in the company's articles.
8. Restrictions on appointment:
A person who is not eligible to become a director cannot be appointed as chief executive. similarly, a director who becomes disqualified from holding the office of director, cannot continue as the chief executive.
9. Removal of chief executive:
The directors of the company by passing a resolution by not less than three-fourths of the total number of directors for the time being, or by the company by a special resolution may remove a chief executive before the expiration of his term of office notwithstanding a thing contained in the articles or an agreement between the company and such chief executive.
10. Chief executive not to engage in business competing with company business:
A chief executive of a public company or his spouse, parents, children and brothers and sisters cannot directly or indirectly engage in any business of the nature carried on by the company. he must disclose forthwith to the company the nature of his business on his appointment as chief executive.
11. Functions of chief executive:
The chief executive of a company carries out the general policies and plans as determined by the directors of the company.
12. Conclusion:
To conclude I can say that, a company other than a company managed by a managing agent must have a chief executive. the board of directors of a company is the top organ of management of a company. it appoints one of its directors as a chief executive or carries out the business and shares the responsibilities of the board. he is appointed for a period not exceeding three years.