What is a CEO?

Career Strategies & Advice

We have all heard of a Chief Executive Officer, but not everyone necessarily understands what exactly the role of a CEO is and what such a person does every day. The CEO of a company is appointed by the shareholders and the BOD. CEOs report to the chairman of the board and is the executive that ranks highest in a business. The primary responsibility of the Chief Executive Officer is to make all significant corporate decisions and manage company operations and company resources. They are the middle man between corporate operations and the BOD.

What is a CEO? What is a CEO

Understanding Chief Executive Officers

There are some nuances to the role of a CEO that cannot be captured in a job description. Understanding these comes with experience, but there are some facts that might help a person on their journey through learning more about the responsibilities of a CEO.

A CEO job description will vary slightly between companies. Elements that usually impact a CEO job description are the corporate structure, the company culture, and the size of the company. In small businesses, CEOs are more involved and take part in the daily functions and operations of the business. In larger companies, CEOs are only involved with top-tier decisions and things that directly impact the growth of the company as a whole.

Chief Executive Officer – CEO Job Description

The CEO works closely with the senior leadership team and the Board of Directors. They are responsible for financial, strategic, and operational leadership in a business.

Primary Responsibilities of the CEO

The responsibilities of the Chief Executive Officer mirror those of the company president or business owner. Let us take a closer look at what the primary CEO responsibilities usually are.

  • Even as the highest ranking executive the CEO serves as a mentor to all staff. Interaction with the CEO helps to encourage development and foster growth among staff and the senior executive team.
  • The CEO is responsible for creating high-quality business strategies that result in continual improvement and increase in revenue. This means that they need to continuously evaluate marketing structures, sales, operational, and financial structures.
  • Part of corporate governance includes being a consultant offering expert advice and acting as a strategic advisor on business deals, negotiations, and contracts relevant to the organization.
  • The CEO works with the Chief Financial Officer and their finance team to set a minimum cash threshold and a solid cash flow projection. They also ensure that an effective and reliable reporting mechanism is in place.
  • The CEO works with the CFO to foster strong banking relationships that are optimized and foster the growth of strategic financial partnerships.
  • They provide strategic input on any decisions that impact the company organizational structure, such as partnerships or mergers.
  • The CEO ensures that key members of corporate leadership and their departments receive the necessary education to improve the planning and budgeting process.
  • At times, part of the CEO duties would include providing expert financial guidance to fellow executive leaders.
  • Effective communication is central to CEO skills. They might need to establish credibility in the business with the Board of Directors who need to establish solutions to business challenges.
  • Sometimes the CEO job might include working on procedures and policies that will increase the operational and financial efficiency of the business.
  • CEO roles might also require analytical skills that allows for analysis of financial trends to help the board and other senior executives to increase authority and credibility.
  • Where strategic plans are in place for long-term growth, the CEO, along with other senior leaders, analyse their effectiveness and adapt them where necessary to meet regulatory actions and board expectations.
  • The CEO is also a strategic partner to the company’s board in the development and implementation of the company’s plans.
  • The team responsibilities of executive leadership are cared for by the CEO. They implement, develop, and plan the organization’s operational and fiscal function throughout the year.

Important Leadership Traits:

There are some essential leadership traits that a CEO needs to possess in order to function optimally in their role.

A CEO needs to be able to communicate effectively on all levels. They are ultimately accountable for actions taken everywhere in the business, and it will be up to the CEO to ensure that staff understand the company’s culture and what is expected of them. The CEO continually drives effective results, which means that they model behavior that will lead the organization to success.

As is often evident in a CEO position description, excellent leadership skills and ability to manage people is necessary for success. This goes hand-in-hand with the aforementioned communication skills, but also encompasses skills like outstanding problem solving skills, decision-making, empathy, etc, that are usually associated with a strong leadership ability.

Furthermore, a CEO requires professional business acumen. Simply being able to manage people is not enough on its own. The CEO job also involves the savvy to take the business in a strategic direction that ultimately brings favorable results to business operations and revenue. For this they also require a strategic mindset.

Chief Executive Officer: Education Requirements and Preferred Qualifications

The educational requirements for CEOs are competitive and differ slightly depending on the industry. For example, the education requirements for a hospital Chief Executive Officer is not the same as for a financial institution CEO. This means that the requirements we list below are generic.

  • A Bachelor’s degree in Business Administration or a related field is preferred.
  • A minimum of between 5 and 10 years practical industry experience is required.
  • Strong evidence of an ability to manage, develop, and train large executive teams is advantageous.
  • The ability to maintain a calm demeanor and executive presence in high stress environments is needed.

Industry specific differences would lie in education requirements and the type of experience that a candidate has in their respective industry.

The Difference Between CEO and COB

The role of the CEO within an organization can be confusing when compared to other executive roles and the board. The board of directors is headed by the chair of the board (COB) who oversees the company in its entirety. The CEO takes responsibility for the operational aspects of the business. The chair is not capable of overruling the board, but the board is able to overrule decisions made by the CEO. That means that the chair is on the same management level as other board members. But the board as a whole is above the CEO. In special cases the chair of the board and the CEO is the same person, but the majority of corporations split the roles and provide two different job descriptions based on business needs.

The Impact of appointing a new CEO

In cases of significantly large corporations CEO changes are reflected in the markets. The response can be either negative or positive. This is due to the impact that a CEO can have on the company’s performance.

Changes in stock prices due to projections of how a company might perform under the new CEO are common, but it is difficult to say which way the stock will really go when a CEO changes. Generally speaking, however, there is most often an initial drop in price due to the risks involved in a CEO change. One factor that impacts the market’s response is the CEO’s agenda, specifically whether they plan to make changes to the existing C-suite and how the market feels about predicted changes. The CEO’s reputation also reflects in the market response.

CEO Job Description Template

The first paragraph contains a few sentences related to what you are looking for in terms of the role you are advertising. For example:

We are seeking a CEO with experience in managing the everyday operations of our corporation. The ideal candidate is prepared to model and build an efficient and supportive company culture, provide expert financial guidance and inspired leadership to our C-suite, and maintain great professional relationships with the board of directors.

CEO Responsibilities:

A list of what the CEO is expected to do will be provided here. For example:

  • Work closely with the HR department to improve hiring practices.
  • Oversee everyday company operations.
  • Build and maintain healthy partnerships and alliances with other companies.
  • Address and identify any opportunities or problems for the business.
  • Work with the C-suite and the board to determine the mission and vision of the business.
  • Help to plan short and long-term objectives.
  • Ensure that regulatory and legal requirements are met, and paperwork in that effect is in order.
  • Work closely with the C-suite and other senior stakeholders.
  • Oversee the company’s auditing, reporting, budgeting, and other aspects of fiscal activity.
  • Help the executive board to create and maintain a business environment that promotes optimal morale and performance among staff members.
  • Assist with recruitment where needed.
  • Take on the role of spokesperson for the corporation.
  • Develop and implement strategic plans and operational policies.
  • Report to the board of directors.
  • Be an inspirational leader for the entire company.

CEO Requirements:

This list is more specifically related to what a candidate needs in their resume to be considered for the position:

  • Ability to delegate, plan own workload efficiently, and perform under pressure.
  • Ability to inspire trust and confidence in staff.
  • Ability to make good decisions and to adequately grasp new issues as they arise.
  • Proven negotiation skills.
  • Proven experience with corporate governance.
  • Understanding of personnel management and HR practices.
  • Ability to build professional relationships with executives, staff, and other stakeholders.
  • Knowledge and understanding of general finance and budgeting, including cash flow management, balance sheets, and profit and loss margins.
  • Experience as a senior manager.
  • Relevant Bachelor’s degree, Master’s degree, or MBA.
What is a CEO? What is a CEO

Frequently Asked Questions

what are the roles, duties, and responsibilities of a ceo?

A CEO usually has many different duties in a business. Their key responsibility is usually to work with the CFO on banking relationships and other strategic financial partnerships.

what is the job description of a ceo?

The CEO job description is a document that stipulates exactly what the responsibilities and duties are of a CEO. A CEO job description can differ slightly between companies or industries, but there are also some generic responsibilities that a CEO has. These are listed above in our CEO job description template.

what is the role of chief executive officer?

The CEO takes on the role of highest ranking executive leadership. They, therefore, take on the responsibility for the entire executive team.

What are the benefits of engaging a headhunter for CEO appointments?

Engaging a headhunter for CEO appointments offers several benefits. Headhunters have deep knowledge of the industry and understand the dynamics of executive leadership. They bring objectivity, confidentiality, and expertise to the selection process. By conducting a thorough search and assessment, headhunters help organizations identify and recruit top talent, ensuring a higher likelihood of finding a CEO who aligns with the company’s goals and can drive its success.

What are examples of other C-suite positions that are impacted by CEO changes?

Other C-suite positions that may be impacted by a change of CEO are:

  • Chief Operating Officer
  • Chief Investment Officer
  • Chief Strategy Officer
  • Chief Technology Officer