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Microsoft Names CEO Satya Nadella as Chairman. What's the Difference Between CEO and Chairman of a Company?

Satya Nadella

Satya Nadella

Satya Nadella, the company’s third CEO, will also be the third chairman in Microsoft’s history, following Gates and Thompson

Microsoft Corp has named chief executive officer Satya Nadella as chairman of the company. Under Nadella’s watch, the software giant has become one of the most valuable companies in the world. Indian-origin CEO has now been “unanimously elected" chairman of the Microsoft Board.

For the first time in two decades the Microsoft CEO and chairman will be the same person. The last time that happened was with Bill Gates around. Gates stepped down as CEO of Mircosioft in 2000.

The corporate structure varies from one company to another, based on a range of factors company policy, shareholder status and others. All companies usually have a board of directors who keep an eye on corporate activities. The board of directors are entrusted with the responsibility to protect the interest of company’s shareholders. The directors elect an executive as a chair who is responsible for presiding over board or committee meetings. A chair often sets the agenda and has significant sway as to how the board votes, says Investopedia.

A chief executive officer (CEO) is the highest-ranking executive in a company. The key responsibilities of a CEO include managing the overall operations and making major corporate decisions, the Investopedia notes. The CEO often acts as the main point of communication between the board of directors and corporate operations. The chair is a different position than a CEO. In some companies, the CEO and chair of the company is the same person.

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Satya Nadella’s Journey to become CEO and Chair of Microsoft 

Nadella, the company’s third CEO, will also be the third chairman in Microsoft’s history, following Gates and Thompson. He took over as a CEO of Microsoft in 2014 from Steve Ballmer. He has focused the company around cloud computing, mobile applications and artificial intelligence while breathing new life into the Office software franchise. Microsoft’s shares have soared more than sevenfold under his leadership and its market value is approaching $2 trillion.

In 2020 amid coronavirus, the Microsoft delivered strong results for our shareholders, including a return of $35 billion in the form of share repurchases and dividends. “The board credits Mr. Nadella for his tremendous progress driving cultural change across the organization, especially given the unprecedented impact of Covid-19 on our business and our people,” Microsoft earlier said in a proxy statement. “Mr. Nadella has enthusiastically fostered a culture of stewardship," it added.

“In this role, Nadella will lead the work to set the agenda for the board, leveraging his deep understanding of the business to elevate the right strategic opportunities and identify key risks and mitigation approaches for the board’s review," the tech giant said in a statement.

Thompson, who took over as chairman from Bill Gates in 2014, will serve as lead independent director, Microsoft said. Thompson will retain significant authority including providing input on behalf of the independent directors on board agendas, calling meetings of the independent directors, setting agendas for executive sessions, and leading performance evaluations of the CEO, the technology giant added.

With agency inputs

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first published:June 17, 2021, 15:05 IST