Definition:

The board of directors appoints a full time executive amongst the directors or employees of the company, who is empowered and is responsible for the management of routine business matters and is known as chief executive or managing director of the company.

Appointment:

1. First Chief Executive:

Every company, other than a company managed by a managing agent, shall have a chief executive. The directors of every company can appoint any individual to be the chief executive of the company. The chief executive so appointed, holds office upto the first annual general meeting of the company. (sec. 198)

2. Subsequent Chief Executive:

After the election of directors the directors of a company shall appoint any person, including an elected director, to be the chief executive for a period of three years. (Sec. 199)

3. Casual Vacancy:

Within 14 days from the date of the office of the chief executive falling vacant, the directors of the company shall appoint any person, including an elected director, to be the chief executive (Sec. 199)

4.Terms and Conditions of Appointment:

The terms and conditions of appointment of a chief executive are determined

by the directors or the company in general meeting. The chief executive is, if he is not already a director of the company, deemed to be its director. (Sec. 200)

5.Restriction 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 (Sec. 201)

6.Removal of Chief Executive:

The chief executive may be removed from his office by the director’s or by the company by passing a special resolution. (Sec 202)

7.Prohibition on Competing Company’s Business:

A chief executive of a public company or his Dfa ho spouse, parents, children and brothers or sisters cannot directly or indirectly engage in any business of the nature in which the company is engaged. (Sec. 203)