What is a chief executive officer and what do they do?

A CEO is the highest-ranking individual within an organisation, and has responsibility for the results, performance and success of the company. They will determine the vision and direction of the business, as well as developing and implementing long-term strategies with the aim of increasing shareholder value. The CEO is the top operational decision-maker and will oversee all departments within the organisation, ensuring that each of these business areas is operating efficiently and effectively, and that targets are being met. The role provides inspirational leadership to the executive team and to the wider business, and sets the overall company culture.

The CEO reports directly to, and is accountable to, the board of directors. The postholder will typically sit on the board and may also be the chair, although generally accepted principles of corporate governance would recommend that this is not the case. The roles and responsibilities of a CEO will vary depending on the company size and structure. In smaller companies, the CEO will have a wider remit and, as well as driving company strategy, they will be involved in more ‘hands-on’ activities, such as the hiring of staff. In larger companies, they will focus on high-level corporate strategy and policy, as well as liaising with shareholders.

Key responsibilities

  • Meeting with and reporting to the board of directors; creating strong working relationships with them.
  • Determining the company’s culture and overall vision.
  • Setting long, medium and short-term strategic goals for the company and ensuring these are measurable.
  • Providing leadership to the executive team, as well as company-wide
  • Driving the profitability of the organisation.
  • Liaising with shareholders, stakeholders, government entities and the public.
  • Overseeing the company’s financial activity e.g. budgeting and auditing.
  • Overseeing the day-to-day operation of the organisation.
  • Assessing the work of individuals within the executive team.
  • Involvement in hiring of (senior) staff.
  • Monitoring staff engagement and turnover.
  • Maintaining awareness of the competitive market landscape, expansion opportunities, risks and industry developments.

Why are they important?

The role of CEO is integrally linked to the performance and the success of an organisation. They are tasked with setting the strategy, vision and culture for the business to enable its success and to deliver profitability and shareholder value.

Skills needed for this role

The diverse nature of the CEO role demands a very broad skillset. Excellent leadership skills are essential, as is the ability to build trust and inspire confidence across all levels within the organisation. A CEO must have strong influencing and negotiation skills, as well as being able to work well under pressure and the scrutiny of shareholders and customers. Successful CEOs need integrity, tenacity and resilience in such a highly demanding position, but should also have solid commerciality and the ability to think strategically.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Advanced Performance Management

Career opportunities presented by this role

Many individuals see the role of CEO as the peak of their career. However, the experience gained at this level means that opportunities will exist to take on non-executive director positions on the board of other companies.

Competencies

High level competencies required include:

  • Governance, risk and control

    A. Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B. Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C. Identifies and manages risk appropriately.

    D. Uses risk management for the best interests of an organisation and its stakeholders.

    E. Monitors and applies relevant legislation, policies and procedures.

  • Leadership and management

    A. Applies appropriate leadership strategies to effectively deliver business objectives.

    B. Leads, motivates and manages people to optimise performance and effectiveness.

    C. Collaborates, supports and works to achieve the objectives of the organisation, applying appropriate digital technologies.

    D. Acts proactively and thinks strategically, in anticipating organisational needs, recognising the wider business environment and dynamics.

  • Stakeholder relationship management

    A. Positively develops relationships with internal and external stakeholders.

    B. Communicates and gains commitment from internal and external stakeholder.

    C. Uses emerging technologies to collaborate and communicate effectively with stakeholders.

    D. Applies professional and ethical judgement when engaging with stakeholders.

    E. Aligns organisational strategic objectives with stakeholder needs and manages expectations.

  • Strategy and innovation

    A. Applies business acumen and commercial awareness to deliver business objectives.

    B. Recommends a range of suitable strategic options from which to develop sustainable plans and objectives.

    C. Evaluates, justifies and implements suitable strategic options.

    D. Adopts and applies innovative methods to implement strategy and manages change.