The Jade Emperor sits on the throne, located in the heart of the Jade Palace. In his hand, he holds a jade scepter, through which he governs the three realms: the Heavens, the Earthen Realm, and the Under Realm.
In ancient times, he, along with his brother, managed to ascend to the Heavens and earned the respect of the gods. As a sign of recognition, the gods bestowed upon the Emperor the jade scepter, while his brother, the long-haired Yanwang Umma-ö, gained a rare power from the gods—the ability to travel to and from the Underworld at will.
The Emperor appointed his brother as the ruler of the nine thousand worlds hidden in the Under Realm, while he himself indulged in the courtly life. Order and tranquility reigned in all three realms, pleasing the gods whom the Jade Emperor would host lavish celebrations for in his palace.
If you want to know a little more about the Jade Emperor and his domain, you must visit the Makipedia.