The role of the CEO is critical to the success of any organization. As the company’s leader, the CEO is responsible for setting the overall direction and strategy, making critical decisions, and ensuring that the company’s resources are used effectively. The CEO must also inspire and motivate employees, foster a positive corporate culture, and build stakeholder relationships. This article will delve deeper into who the CEO is and who they are not.
The CEO is the Highest-Ranking Officer
The CEO, or chief executive officer, is a common title for the man or woman in charge. The title usually has an air of magnitude, suggesting leadership over a large, established company. In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is often second in charge.
The CEO is usually not the Chairperson
Do not confuse the role of a CEO and that of a Chairperson of the Board. The CEO is the top operational decision-maker at a company. At the same time, the Chairperson of the Board is responsible for protecting the investors’ interests and overseeing the company as a whole. The Board of Directors usually meets several times a year to set the company’s long-term goals, review financial results, evaluate the performance of executives and managers, and vote on strategic decisions proposed by the chief executive. On that board of directors, there can be steering committees who are overseeing notable investments and strategies (such as IT investments)
CEO’s Rank Lower than the Chairperson
The Chairperson of the Board is technically superior to the Chief Executive Officer, as they cannot make significant moves without the board’s approval. The Chairperson could essentially become the ultimate boss of the company or organization. However, this is rare, as most board chairpersons are not directly involved in day-to-day business operations, leaving the CEO flexible in running the company.
CEOs Are Held Accountable
Their primary responsibilities include managing the operations and resources of a company, making major corporate decisions, being the primary liaison between the board of directors and corporate operations, and being the company’s public face. In addition, because the board is in charge of executive functions, and the CEO is responsible for integrating company policy into day-to-day operations, the CEO often fills the role of Chairperson of the board.
While unusual, a company without subsidiaries may have one person execute the roles of CEO, president, and perhaps even chair. As such, more excellent communication and contact can be achieved between the board of directors that sets policies and the president who oversees the day-to-day operations.