<P> In some European and Asian countries , there are two separate boards , an executive board for day - to - day business and a supervisory board ( elected by the shareholders and employees ) for supervising the executive board . In these countries , the CEO ( chief executive or managing director ) presides over the executive board and the chairman presides over the supervisory board , and these two roles will always be held by different people . This ensures a distinction between management by the executive board and governance by the supervisory board and allows for clear lines of authority . The aim is to prevent a conflict of interest and too much power being concentrated in the hands of one person . There is a strong parallel here with the structure of government , which tends to separate the political cabinet from the management civil service . In the United States , the board of directors ( elected by the shareholders ) is often equivalent to the supervisory board , while the executive board may often be known as the executive committee ( operating committee or executive council ) , composed of the CEO and their direct reports ( other C - level officers , division / subsidiary heads ) . </P>
<P> In some European and Asian countries , there are two separate boards , an executive board for day - to - day business and a supervisory board ( elected by the shareholders and employees ) for supervising the executive board . In these countries , the CEO ( chief executive or managing director ) presides over the executive board and the chairman presides over the supervisory board , and these two roles will always be held by different people . This ensures a distinction between management by the executive board and governance by the supervisory board and allows for clear lines of authority . The aim is to prevent a conflict of interest and too much power being concentrated in the hands of one person . There is a strong parallel here with the structure of government , which tends to separate the political cabinet from the management civil service . In the United States , the board of directors ( elected by the shareholders ) is often equivalent to the supervisory board , while the executive board may often be known as the executive committee ( operating committee or executive council ) , composed of the CEO and their direct reports ( other C - level officers , division / subsidiary heads ) . </P>
the board of directors of a u.s. corporation is elected by
the board of directors of a u.s. corporation is elected by
the shareholders
the shareholders