The CEO Role: What It’s Really About

CEO is a word that we often hear and most people feel they know what it means. The position of chief executive officer usually brings about associations related to power, authority and being in a position where someone is never questioned.  

Such a view of the CEO role is outdated and doesn’t have a lot to do with the modern day business world. The CEO is on the top of most company’s hierarchy but they can’t function without other important members of the management team.

The exact role of a CEO in a company differs from business to business. However, there are certain things that are true for the role of CEO in general. What a CEO can and can’t do? What duties do they have? What’s their relationship with other senior executives in the company? Let’s explore these questions.

Are a CEO and Founder the Same Person?

There’s a misperception that a CEO is necessarily the founder of a company. Bosses of big companies such as the late Steve Jobs, Bill Gates or Mark Zuckerberg have informed this view.

For practical reasons many companies start their functioning with the founder being also the CEO. The founders feel naturally invested in the company’s success. They’re an obvious choice for this role as they know the direction they want the company to take.

Another reason why the founder is often a CEO is that hiring another person for this position is costly. An experienced senior executive at this level will ask for a big salary. A founder may not be as knowledgeable but is often willing to put in the hours necessary to learn more about the role. 

Due to the fact that the role of CEO is best filled by a specialist, founders often step down to change roles or withdraw from the company’s operations entirely. In brief, even though it’s often the case that the founder doubles as CEO, it’s not always true.

A CEO’s Duties  

A CEO may choose many of their duties. Still, there are certain tasks that they have to perform due to their role:

Deciding on the company’s strategy and business direction

It’s up to the CEO to decide what a company should focus on. Any changes to business direction such as partnerships, new products or services, expansions or limitations are within the description of the CEO role.

Choosing values, behaviours and culture of a company

These days we often speak about how important it is for employees to be a culture fit for a company. A company’s culture is influenced by values and behaviours and those are for the CEO to decide on. There are many benefits of having a strong corporate culture and in fact, it’s becoming more important.

Choosing and leading the management team

Choosing, hiring and firing the members of the senior executive team is one of the most important duties in the role of CEO’s. They choose senior employees. They bet on those who will understand the company’s strategy and enforce company values. 

Deciding on a budget

A CEO has to decide on a company budget, choosing things to invest in and focus to make money. All major spending’s are in their hands. Like with other duties a CEO can consult others to make more informed choices.   

In more established companies the role of chief executive officer is often limited to these responsibilities. Having said that, the main measurement of a CEO being successful in his role is the company’s success. Particularly for start-ups and small companies it means that the duties of a CEO are very vast.

CEO’s Job Performance

Because a CEO’s main measurement of success is the company’s success, it should be evaluated by the company’s performance. A CEO receives feedback and consults with other senior executives on different matters. And yet, no one controls their day-to-day activities.

Even though a CEO is the senior officer on the very top of an organisation’s organogram, it’s not true that there’s no one they’re accountable to. Usually, they report directly to the Board of Directors. It often happens that a CEO is also one of its members or a chairperson. Even so, there are good reasons to want to separate these two positions. 

While a chairperson and a CEO may be the same person, there’s a different set of responsibilities for both of them. A chairperson of the Board of Directors is mostly preoccupied with overseeing the company as a whole to protect the interests of its shareholders. A CEO is the person who actually runs the company and directs it in its daily operations.   

A CEO, after all, is still an employee. They receive a fixed salary and can be shown the door. How can a CEO or founder be fired? Unless they own a controlling share in a company they can be voted out by the Board of Directors.

Due to various implications of a decision of this type, such as the influence on public image, it’s only done when required. A CEO usually gets fired in relation to long term poor financial performance of a business, different views on the future of the company or company politics.

Finding a CEO

Thanks to this blog post you’ve learnt the answer to the question “What is the role of a CEO?”. As shown, there are many responsibilities that they need to take on. There are also some limitations to the role of chief executive officer who is held accountable for their actions.

Finding someone right for the position is not an easy task. After all, this is a person who will be strongly identified with the company. Such an individual needs to be professional, trustworthy and experienced. There are many secrets of great CEO selection.

If you’re representing an organisation looking to fill this vacancy, you may want to hire professional help. At CS Executive Group we know how to find the perfect talent for your business. Our executive head-hunters boast second to none industry knowledge.

Don’t hesitate and contact us to learn how our senior executive recruitment services can help you find the CEO your business deserves!

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