Chief Executive Officer: Definition, Role, Duty

Who is a Chief Executive Officer

Chief Executive Officer or CEO is not an uncommon term. We all heard about Jeff Bezos CEO of Amazon, Elon Musk CEO of Tesla, Mark Zuckerberg CEO of Facebook, etc. But the question is, who is a CEO? What does a CEO do? How does a CEO get the position? In this article, we will answer these questions and tell you more about the chief executive officer.

Definition of CEO

In simple words, the CEO is the highest-ranked official and the first person to hold the responsibility of a company.

The chief executive officer is the key person in a company. He or she makes all the important decisions that concern the company and its employees. A CEO must be experienced, well educated, and smart enough to run a large corporation like Apple, Microsoft, Facebook, etc. A CEO has many responsibilities such as formulating policies, organizing business operations to run the business, managing human resources, and providing direction for their company.

How does a person become CEO?

A person who wants to become a CEO has to start from the bottom and work his way up. A CEO role is not achieved overnight. There are many steps that can be taken in order to become a CEO such as education, experience, hard work, leadership, good communication skills, ability to make quick decisions in difficult situations.

A CEO is mostly elected by board members or shareholders, but occasionally they can also be appointed by the president or member of the board. But in some cases like SpaceX or Microsoft, a CEO can also be a founder. But in case his/her performance is not satisfying, the board can change or remove the person because the future of the company depends on his or her ability to lead it.

What is the role of a CEO?

The CEO’s role is generally to make all the key decisions and manage or supervise the other executives. Here are some of the main duties of a CEO

  • Formulate company strategies and policies
  • Engage with external stakeholders
  • Providing vision and direction to run a successful business/company
  • Manage the business operations
  • Manage employees and human resources
  • Develop & implement plans, policies & procedures to establish goals
  • Increase shareholder value

According to many studies, a CEO influences 45% of the company’s value. Therefore, we can say that if a good and successful CEO is hired, the company will grow and will be more valuable than other companies.

Are CEOs and Presidents the same?

No, the CEO is not the same as the president. Since the CEO is the highest-ranked official, he/she makes the final decisions and a president is the second highest-ranked official after a CEO. However, at times they make joint decisions together on certain matters. In some companies, a CEO and President can be the same person as well.

Conclusion

In conclusion, we can say that a CEO is the highest-ranked official of any company and makes all the key financial decisions. He or she has to manage and supervise other executives and must be very successful and experienced in order to make better decisions for the company. The CEO role has many responsibilities which are very important in order to run a company successfully.

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