What Is the Executive Team? — Dividing Roles Among the CEO, CxOs, and Executive Officers

You cannot tell who signs off on a piece of material by reading down the list of titles. Even within the same "executive team," the CEO, the CxOs, and executive officers differ in what they decide and in the legal responsibility they carry. Without grasping this division of execution — who decides what, and who bears responsibility — you will misread the person across the table on the review floor, where the emphasis should shift depending on "whose decision is this." This piece returns to the Companies Act and the Sales Information Provision Guidelines to sort out the roles that the single word "executives" bundles together.

01What the Single Word "Executives" Bundles Together

"It's a management decision." "That's a matter for the executives." On the materials-review floor, the executive team is often spoken of as a single subject. But its contents are divided. The CEO who steers the whole company; the CxOs — the CFO, COO, CCO, and others — each entrusted with a function such as finance, operations, or compliance; and the executive officers who run the daily business under delegated authority. Within the same "executive team," neither the scope of what they decide nor the vantage point they look from is aligned.

This difference bears directly on where review places its weight. What you should examine changes with "whose decision is this." The material a sales-bred CEO is pushing and the material a compliance officer (CCO) has cleared call for different readings of risk in the first place. The instant you see the other party as an undifferentiated "executive team," you lose the ability to read which vantage point a given decision came from.

02Responsibility Is Fixed by the Delegation of Authority, Not by Title

Measuring an executive's "responsibility" by the seniority of a title is risky. Under the Companies Act, it is the directors who carry out the company's business execution; in a company with a nominating committee, the executive officers (shikkō-yaku) do so (Companies Act, Article 418). The framework for those decisions is held by the board of directors (Article 362). Meanwhile, many of the people commonly called "executive officers" (shikkō-yakuin) are not officers under the Companies Act. They may be no more than internal posts acting on authority delegated by the board or the representative director.

In other words, the person who stamped the approval on a request form and the person who ultimately bears the legal responsibility are not necessarily the same. When you look at who signs off on a piece of material, you need to read not by the gravity of the title but by the delegation structure — where that person's authority was delegated from, and where the line of responsibility runs. The substance of the fiduciary duty an officer bears as one entrusted by the company with a role is taken up in The Board's View, Vol. 2.

03Review Stands on the "Separation of Oversight and Execution"

The Companies Act separates the board of directors, which handles decision-making and oversight, from the execution that actually carries the business out (Article 362). Materials review is part of the internal control over this execution process. Materials made on the ground are checked within the execution line, and deviations are stopped. Whether that mechanism functions ultimately connects to the board's duty of oversight.

That is why a flaw in review does not end as one mistake on the ground. It is a hole in the control over execution and, pushed to its conclusion, can become the entry point to a breach of the board's duty of oversight. What the reviewer faces is a single piece of material, but behind it stands the corporate-governance structure of oversight and execution.

04The Reviewer's Judgment Is the Discharge of an Executive Duty

Section 2-1 of the Sales Information Provision Guidelines clearly positions the building and functioning of a review-and-oversight system that secures the appropriateness of materials as a duty of the executives. Review, then, is not clerical work cut off from management. It is the act of giving concrete form, along the execution line, to a duty the executives bear legally and ethically. How management accounts for this duty to the outside (comply or explain) is treated in detail in The Board's View, Vol. 3.

Hold this coordinate, and the reviewer's words change. Instead of "I am sending it back because that is the rule," you can say, "This is the discharge of an executive duty, and I am carrying out that execution on their behalf." Identify from whose vantage point — company-wide optimum or functional optimum — the other party judged, and explain it against the duty the executives themselves bear. That is the first step toward reading management's decisions at high resolution and choosing words that land with the person across the table.