Analyzing Inherent Authority of the CEO in Joint-Stock Companies; Looking at French Law and Emphasizing Judicial Procedure

One of the most challenging issues of corporate law is determining the limits of the CEO's authority. The legal status of the CEO in joint stock companies is a vague and controversial issue in law, doctrine and judicial practice. Some professors, referring to articles 124, 125 and 128 of the legal bill of 1347, consider the CEO to be the company's lawyer and conclude his non- authority and others, according to article 589 of the Commercial Code and inspired by french law, believe that the CEO is considered as one of the pillars of the company which leads to the principle of CEO authority. The aforementioned disagreement has been originated from an innovative translation of french Articles of Law; which is not only against the law of its origin; but also not compatible with the realities of the commercial world. Regarding the CEO’s relationship with the Company, determining the limits and scope of the CEO's authority has a close relationship with choosing among the theory of agency or recognizing CEO as a pillar of the company. In this article, the authors have analyzed the basis of the need to align the powers of the CEO with the board of directors through a trans-legal approach and regarding french law and judicial procedures and considered the CEO as one of the pillars of the company, just like the board of directors empowered with broad inherent authority derived from the law and do not consider the limitation of his powers against third parties in good faith correct.