CEO - Chief Executive Officer
An organization's chief executive officer (CEO), chief administrator, or just chief executive (CE) is one of the main executives in charge of managing an organisation, particularly an autonomous entity such as a firm or non-profit institution. A chief executive officer (CEO) is the topmost level executive in the firm. Public and private businesses, as well as non-profit organisations, have CEOs. Government agencies also employ CEO. Moreover, the CEO is the public face of the firm or organisation. The board of directors and the company's shareholders vote for a CEO.
CEO's foremost role is to make the most important and crucial decisions for the company, supervising the corporation's operations and management. He also has the responsibility to act as the primary point of interaction between the management board (directors) and business operations. In most cases, the CEO reports directly to the board of directors and is tasked with increasing the profitability, value, and success of the brand, which may include increasing the stock price or market share or maximise profits, among other factors.
Roles and Responsibilities of CEO or Chief Executive Officer
Most CEOs in the non-profit and government sectors work toward achieving the mission of their organisations.
Executives are assigned specific responsibilities by their organisations' boards of directors or other authorities, based on the structure of their organisations. Most often, they are embodied in an official delegation of powers relating to business management. They are typically responsible for the strategic business plan, crucial policy matters, leadership, management, and execution.
As a communicator, he may have roles to speak to the media and the general public, as well as to supervisors and employees of an organization; Whereas in the case of being a decision-maker, the CEO is responsible for making vital decision making about policies and strategies and tactics.
A company's chief executive officer (CEO) is responsible for reporting the organisation's financial status to the board of directors, motivating staff, and driving organisational change. Chief executive officers (CEOs) are responsible for a company's overall business decisions, encompassing operational activities, merchandising, business growth, finance, and accounting.
Companies' CEO roles vary according to the sizes and stature of the corporate entities. Also, it is highly dependable on their cultural norms and values. Corporate chief executives are typically only involved in highly crucial decisions of the firm and those that affect the company's growth. Whereas in small firms, they may be performing more duties and roles. The CEO of a company is not always the owner or the head of the company. When it comes to electoral campaigns, the chief executive officer of a political group is often delegated with fundraising duties.
Because of their frequent interactions with the public, CEOs of big businesses can become well-known at times. For example, it is commonly known that Mark Zuckerberg runs Facebook (FB). Similarly, it is known Steve Jobs, is founder and CEO of Apple (AAPL), who became such a global superstar. Moreover, a flood of documentaries about him have appeared after his death in 2011.
In few international countries, the CEO function on a two-board system. One is the executive board that requires them to work regularly and take action in every day to day activities. At the same time, the other board is the supervisory board, where they are selected by the shareholders to supervise and look into the crucial and essential plans/strategies of the company.
So, in these nations CEO manages or leads the executive board, and the supervisory board is led by the chairman. Hence in these international countries, these two posts are held and managed by two different individuals. This helps in a clear distinction between the executive and the supervisory board.
As a result, authority is clearly defined. The purpose is to avoid any conflicts of interest or concentration of too much power in the hands of one person or group of people.
The management team or the board director (chosen by shareholders) in the United States is often referred to as a supervisory board, while the executive board (the division or the C-level officers who report directly to the CEO) is referred to as an executive board.
As a general rule, the executive board of a corporate entity is usually its highest level officers, with the chief executive officer (CEO) being a very well-known personality.
Corporate disclosure laws define "executive officers" as the five highest-paid officers who are not also members of a company's board of directors, for example. Executive officers are the only owners of sole proprietorships. When it comes to partnerships, an executive is either a managing or senior associate. In a limited liability company, any representative, manager, or officer is an executive official.
Other Related Positions
Often, firms have a two-tiered corporate hierarchy to serve the interests of shareholders. First Tier is comprising of the Board Directors, and the second tier comprises the upper management officials, including the COO, CEO, CFO.
The Board of Directors is the utmost regulatory body of the company, and it is put into power by shareholders. The Chairperson and CEO are selected by the Board of Directors. The Board of Directors chooses the COO - Chief Operating Officer - and the CFO - Chief Financial Officer - on the CEO's advice.
There could be many subservient employees reporting to a CEO who assists in running the business on a day-to-day basis. These subservient employees are known as senior executives, executive officers, or corporate executives/managers.
The vice-president is a widely known title for a junior executive in organisations where the CEO is the president.
Many organisations have multiple vice presidents, each responsible for a separate area of the company's operations (e.g., VP of finance, VP of human resources). Chief operating officer (COO), chief financial officer (CFO), chief strategy officer (CSO), and chief business officer (CBO) are some of the posts that fall under the category of subordinate executive officers and usually report to the CEO. As per the statement of Anthony Johndrow, CEO of Reputation Economy Advisors, a chief reputation officer's position can be seen as "simply by adding another way to focus to the position of a contemporary CEO, in which they are both the external face of and the guiding force behind an organisation's culture."
CEO Change Impact on the Company or Organisation
When a chief Executive officer takes over a corporation, the stock price could change due to various reasons.
There is, however, no cause-and-effect relationship between both the performance of a stock and the declaration of a new CEO.
However, there is more downside risk with a change in CEO than upside, especially when it is unplanned. The overall market opinion of the prospective CEO's capacity to lead the business could cause the value of the stock to rise or fall. So, while investing in the stock that is going
through a change in management, the new CEO's goals, objectives, and mission are crucial, whether there will be a negative change in business direction or a positive one and how well the firm's C-suite is handling the change.
Shareholders are more receptive to new CEOs who are knowledgeable with the fundamentals of the firm's business as well as the unique issues that it may face.
Shareholders will usually look at a new CEO's reputation of increasing profitability.
Qualities and Traits of a CEO
CEO's role requires a lot of responsibility, versatility. They have a lot of responsibility on their shoulders in providing value to the company or organisation.
Best-practice CEOs know that satisfied workers are integral to the organization's growth and are incredibly productive, even though they are the decision-maker. Better results are achieved when your teams are actively involved. So as a CEO, it is essential to deliver mentorship and support whenever possible.
CEO and Chairperson
It is essential to note that the CEO and Chairperson of the Board have distinct roles and should never be confused.
The CEO is the organization's highest level decision-maker, while the Chairperson of the Board is essential for safeguarding the interests of investors and supervising the firm as a whole.
The Board of Directors often have meetings for goals, reviewing financial performance, evaluating the performance of executives, and consider voting on key choices suggested by the chief executive.
Chairperson is superior to CEO and has a technical advantage because he or she can't make important decisions without the board's consent.
The chairperson of a business or firm could effectively be the top boss.
Most board chairpersons aren't engaged in the regular operations of their companies; it is usually the CEO that has the responsibility to run the firm at his/her convenience.
Qualifications and Requirements
Although there are no specific requirements to be a CEO of the company, but there are few qualifications that can be taken into consideration for better performance and growth of the organisation.
Some successful CEO'S
Some of the honourary mentions of the CEO around the world include;
These are just a few of the eminent CEOs around the list of successful and prosperous CEOs is more extensive than this.