Definition for CEO
A CEO stands for Chief Executive Officer. The chief is the top-ranking manager on the corporate ladder.
The professional is usually the face of the organization. The Chief must ensure the profitability and sustainability of the business.
Every organization, from a budding start-up to a giant MNC, everyone has its CEO.
The professional must thrive in high-pressure environments and oversee strategic decision-making.
Role of the CEO
The CEO heads the team of executive directors and is the top-ranked manager. The Chief Executive officer’s role varies with the company’s size and corporate structure.
The Chief Executive of small ventures handles the company’s daily operational operations. But, the top-most manager of giant MNCs goes for the core tactical responsibilities.
However, the top-most managers of giant MNCs handle the tactical responsibilities.
The Prime Responsibilities of the CEO:
- Deciding the vision and mission of the company for profitability and sustainability.
- The top-ranked manager is a conduit between the management and the board of directors.
- Establish a transparent and trustworthy relationship with the board of directors.
- The top-ranking manager in public companies helps improvise share prices
- Navigate partnerships with stakeholders.
- Ensure legal compliance and meet the needs of all employees, customers and investors.
- Lead the organization’s long and short-term goals.
- Formulation, leading and guiding the organization’s strategic plans.
- Much involved in directing and delegating agendas
- Improvise operations and effective resource management.
- Allocate the capital and set up a top-notch team of executives that includes the CFO, COO, etc.
- The chief ensures the management sticks to the company’s decisions.
As the Company’s Top Manager, the Chief Executive Officer Must Also Have the Following:
- A sharp eye for the competitive environment
- Risk-evaluation management
The Chief Executive appoints Chief Financial Officer(CFO), to handle financial aspects. CFO conveys budget strategies profitable for the company’s long-term goals and sustainability.
Qualities of CEO
The Chief Executive Officer shoulders responsibility for the organization’s success and failure. A top manager without exceptional skills is an organization to the tank.
A Chief must have these nine qualities to lead the organization:
- Technical Skills in Finance and Marketing
- Have a knack for interpersonal communication and negotiation skills.
- An exceptionally sharp mind with analytical and critical thinking abilities.
- Top management skills to render a healthy growth work culture.
- Passion for corporate success.
- A leadership persona sets the organization up for success.
- An eagle eye for details
- Decision-making ability
- Experience in setting business strategies.
Educational Qualifications of a CEO
Professional skills with solid skillsets pave the way to becoming a Chief Executive.
An MBA with extensive work experience in finance and managerial domains is a great fit.
Difference Between CEO Vs Chairperson
The Chief Executive Officer is the organizational leader while the Chairperson of BOD. The officer must report to the board and the chairperson all the developments and goals set by the team.
In the Anglo-Saxon model, the Chief chairs both the BOD and management. But the global model for separate chairperson and chief helps avoid unhealthy dynamics.
Reasons for Firing the Chief Executive
- Poor performance
- Lack of leadership capabilities
- Out-dated working style
- An uncooperative relationship with the BOD, etc.
Frequently Asked Questions (FAQs)
Q1: Is the CEO the Most Powerful Person in the Organization?
Answer: No, despite being the top operator of the organization, he is not the most powerful of all. Chief Executive’s fate in giant corporations lies in the hands of its Board of Directors.
The Board of Directors is a group of members who represent shareholders’ interests. They evaluate the highest-ranked manager’s performance and capabilities.
Q2: Are CEOs Elected Personnel?
Answer: Majorly the BOD elects the chief executive officer internally or externally.
Yet, it doesn’t overrule the possibility of the owner as the company’s chief executive. In small businesses, the company’s owner can be the chief executive.
Q3: Can you Fire a CEO?
Answer: In the European business model, the board of directors elects the chief executive.
If the BOD finds the chief executive’s performance unfit for the company’s growth, they can fire him.