The CEO is the highest ranking executive in a company. The CEO’s main responsibilities are developing and implementing high-level strategies, managing the overall resources and operations, make major decisions and acting as the point of communication between the corporate operations and the board of directors. CEOs sometimes have a position on the board and sometimes are even the chairman. However, as seen in David Kiger’s blog, every CEO has a unique approach to the role.
The CEO’s Main Tasks
Shareholders and the board of directors usually elect the CEO. In large corporations, the CEO directs the company’s overall growth, but in smaller companies the CEO is often involved in the day-to-day operations. In large companies, it is the CEO who leads, creates policy and motivates the employees.
Good CEOs are realists. It’s all right to think positively and maintain professional optimism, especially in public settings, but CEOs should not live in a fantasy world. They can go with their gut feelings, but it is usually an educated gut feeling.
The CEO’s Responsibility
The first responsibility of a CEO is strategy and vision. Investors may approve a business plan and senior management may help develop strategy, but the CEO sets the direction. This includes selecting markets, considering competitors, choosing product lines and how to stand above the rest in their niche.
The second responsibility of the CEO is to build company culture. Happy employees are more productive. The top candidates will choose a company with a good culture. A second-rate company culture will drive away high-performers. Some ways in which the CEO send the message of company culture are how he or she dresses, who they talk to, how mistakes are treated, how much risk-taking is recommended as well as who is fired, who is hired and what the rewards are.
The third main responsibility is team-building. The CEO selects the senior management team, who in turn, hires and fires the rest of the employees. It is important for a CEO to be able to fire non-performers as well as resolve differences between senior management, so they continue to work together in a common direction.
The CEO must also convey values. These tell employees how the company will achieve its goals. The CEO sends the message through their behavior. If they support and model trust, openness and honesty, the whole company will follow suit.
The fourth responsibility is to set budgets. The CEO must fund the projects that succeed and cut the budgets or close down projects that lose money.
A company or organization depends on their CEO for success. If the above duties are done properly, the company will earn more profit.