Parsons will oversee the franchise while the league tries to force owner Donald Sterling to sell it following his lifetime ban for making racist remarks.
NBA Commissioner Adam Silver said Friday in a statement that Parsons "will bring extraordinary leadership and immediate stability to the Clippers organization."
"Dick's credentials as a proven chief executive speak for themselves and I am extremely grateful he accepted this responsibility," Silver added.
With Sterling banned from anything to do with the team or league, and team President Andy Roeser on an indefinite leave of absence, the league and Clippers worked together to find someone to lead the organization along with coach Doc Rivers.
"Like most Americans, I have been deeply troubled by the pain the Clippers' team, fans and partners have endured," Parsons said. "A lifelong fan of the NBA, I am firmly committed to the values and principles it is defending, and I completely support Adam's leadership in navigating the challenges facing the team and the league."
Parsons is currently a senior advisor at Providence Equity Partners and sits on the board of directors for the Commission on Presidential Debates. He has also been on President Barack Obama's economic advisory team.
A graduate of the University of Hawaii, Parsons earned a law degree from Albany Law School in 1971 and became a staff lawyer for New York Governor Nelson Rockefeller. He moved to Washington when Rockefeller was appointed vice president, and also worked closely with President Gerald Ford.
Parsons left the legal field in 1988 to become president, then chairman and CEO of Dime Bancorp, Inc. He was Time Warner chairman and CEO from 2002-08, then chairman of Citigroup from 2009-12.
He will represent the franchise in owners meetings while the league tries to work out the team's ownership situation.
A three-fourths vote of owners is required to force Sterling to sell the team he has owned since 1981. His estranged wife, Shelly, wants to keep her 50 percent ownership stake in the team, her lawyer said Thursday, and Silver said so far the ban only applies to Donald Sterling.
While that potential fight goes on, the Clippers are trying to stay focused on the playoffs following their most successful regular season ever. They are tied with the Oklahoma City Thunder entering Game 3 of their Western Conference semifinal series.
"The Clippers are a resilient organization with a brilliant coach and equally talented and dedicated athletes and staff who have demonstrated great strength of character during a time of adversity," Parsons said. "I am honored to be asked to work with them, build on their values and accomplishments, and help them open a new, inspiring era for their team."