What Actions Can Disqualify a CEO's Position?

What Actions Can Disqualify a CEO's Position?

Anas Bouargane 09/10/2020 6
What Actions Can Disqualify a CEO's Position?

A Chief Executive Officer (CEO) is the top manager of a large corporation.

What Actions Can Disqualify a CEO's Position?


A CEO is mainly selected for their leadership skills and are often an integral part of the company’s board of directors.

A CEO makes all the major operational decisions that affect the company in many significant ways. However, a CEO’s position is not set in stone and they can be fired or disqualified from the position.

There are significant differences between CEOs and actions that may be condoned in one corporation may be considered highly taboo in another. However, there are actions that may lead to the disqualification of all CEOs such as:

Taking on Too Much Debt

A CEO is the main person in control of how much debt the company acquires for investment or for operations. One reason why a CEO may disqualify a CEO is if they take on too much debt. 

Debt can either be good or bad for a company. It is often referred to as leverage which means that it can enhance or diminish the financial ability of the company.

However, a company that takes on too much debt is bound to fail. Much of the company’s profits will be used to pay back the debt instead of growing the company or paying dividends to shareholders.

Taking on too much debt will disqualify a CEO sooner rather than later.

Breaking Company Policy

CEOs are involved in many endeavors in leading their companies. Sometimes, a CEO may deem it fit to break company policy so long as it accomplishes the goal the company wants to achieve.

In some cases, such actions may also constitute breaking the law. Regardless, such a CEO will need Specialists in Director Disqualification Lawyword to help with the legal ramifications of their actions. The specialists specialize in helping CEOs and other company directors prevent disqualification from the company. However, in some cases the evidence might be too overwhelming for the specialists to cause any significant change.

Poor Performance

A CEO’s job includes many roles and responsibilities that vary from company to company. However, one job all CEOs must do is perform well, which means to consistently ensure that the business is profitable.

If a company is not performing well in terms of profitability or simply not achieving its goals, the CEO will be the first person to be blamed. When poor performance continues for a certain time, disqualification from the position is imminent.

Another great role of all CEOs is leadership. If the CEO is not leading the company properly or is taking the company in a drastically different direction than what the shareholder’s want, they will probably be disqualified.

Employee Discrimination/Abuse

The CEO is the leader of a company and all the employees working under him or her. It is his/her job to ensure the company’s employees are performing to the best of their abilities.

If a CEO is discriminating against certain employees in the company, then he/she will be breaking company policy and should be disqualified. The case is worse when the discrimination turns into abuse for example sexual harassment in which case the CEO may be arrested.

There have been many CEOs in the past who have been disqualified from their position because of employee discrimination. The head employee abusing employees under him is a surefire recipe for trouble in a corporation.

Disobeying the Board

Though the CEO is the leader of a company and heads all day to day operation, he/she must eventually answer to the Board of Directors. The Board of Directors is the main panel of leadership in the company and oversees all of the company’s general policies.

The CEO is expected to follow the instructions of the board which is selected by the shareholders. The same goes whether the CEO is an Executive Board Director or not.

If the CEO fails to heed the words of the board, they will soon be disqualified from the position. The board has complete power over the company and is the only party that can fire a CEO.

Conviction/Imprisonment

What Actions Can Disqualify a CEO's Position?


A CEO may break the law in certain ways which would put him/her in a very difficult position. One thing that will surely happen if he/she is imprisoned is that they would be disqualified from the position.

The CEO can be arrested but the charges dropped after some investigation. A conviction can also be overturned if there is enough evidence after the fact.

The CEO may temporarily be disqualified from the position until the results become clear.

A CEO is the highest-ranking employee in a company and oversees much of the daily operations. However, the CEO can be disqualified from the position due to certain actions including the ones described above. A CEO disqualification can be prevented by certain specialists who use the law to prevent director disqualification.

Share this article

Leave your comments

Post comment as a guest

0
terms and condition.
  • Ricky Morgan

    Board of directors sack CEOs if they fail to reach profitability and growth objectives.

  • Mike Uttley

    I will never work as a CEO even if I am promoted... It's a tough position...

  • Stuart Black

    Abide with the rules and you can stay in your position for years !

  • Jason Marsh

    Informative..

  • Luke Hardy

    I wanna be a CEO just for 1 DAY to taste SUCCESS. I'll wear my best TIE & SUIT.

  • Adam Gratton

    Taking on too much debt and inappropriate behaviour is dangerous for the CEO and the company. Hiring the right person is key.

Share this article

Anas Bouargane

Business Expert

Anas is the founder of CEF Académie, a platform that provides guidance and support for those willing to study in France. He previously interned at AlphaSense. Anas holds a bachelor degree in applied economics from the University Paris Sud.

   

Latest Articles

View all
  • Science
  • Technology
  • Companies
  • Environment
  • Global Economy
  • Finance
  • Politics
  • Society