The research on the problems of CEOs’ legal status and legal liability

Purpose – The importance of CEOs (chief executive officers) is not to be underestimated and this paper seeks to identify the problems in law of definition and thus liability of CEOs. Design/methodology/approach – This paper draws upon the legislative and judicial experiences of China and compares them to those of the USA. Findings – Since an owner and a manager become “the principal‐agent relationship” in the enterprise, the manager's “moral venture question” is inevitable. With the development of corporate governance structure, CEOs appear, thus people begin to take care of CEOs’ legal status and legal liability. A CEO has not only a manager's authority of office, but also some part of authorities of board of directors and president, so a CEO's legal position is higher than that of a manager. Because the questions caused by CEOs are increasing, it is necessary for us to draw lessons from American Corporate Law Reform, to revise our Corporate Law, to make definite CEOs’ legal status and to strengthen CEOs’ legal liability. Originality/value – The findings will hopefully influence reform and development in this area in China.