Business Advice, Leadership

What is the Role of a CEO?

Business Advice | 26 June 2023 | 11 months ago

In order for a business to be successful, leadership and guidance is essential, and a lot of this falls into the hands of the CEO. CEO stands for Chief Executive Officer, which is the highest ranking executive or leader in a business. The majority of large businesses have a CEO, and that person is responsible for making major business decisions, managing overall operations and driving the company forward both strategically and practically.

Generally, a CEO reports to the board of directors, and they usually have other executive leaders reporting to them. They are responsible for overseeing various aspects of the business, including finance, operations, marketing, human resources and overall performance. In fact, a lot of what happens in a business can be linked to the CEO, either because they put the plan into place or they communicated the development to shareholders.

The main role of a CEO is to provide leadership, set goals and objectives for others, and ensure business success and growth over a long period of time. A CEO has a wide range of responsibilities including executing the company’s business plan, demonstrating leadership skills, hiring senior executives and communicating with third parties. Of course, these responsibilities do vary from CEO to CEO, from business to business, depending on what is needed from the role.

To help you understand what the role of a CEO entails, we have detailed some of the key responsibilities below.

Developing and Executing the Company’s Business Plan

There is a lot that goes into being a CEO, a lot of which is centred around developing and executing the company’s business plan. This is a vital role, as a solid business plan is an essential part of running a successful business, and the business is likely to struggle without one. The job of a CEO is to establish what the business needs and carry out the business plan, making adjustments and changing the direction strategically along the way. Though a CEO doesn’t create the business plan on their own, they have a big influence on the business’ journey. 

Demonstrating Leadership Skills

There are many key characteristics a CEO should have, and these attributes are what helps an excellent CEO stand out from the rest. One of the most important is leadership, as that’s exactly what a CEO is expected to do, lead the company towards success. A credible leader needs strong leadership and communication skills, especially when it comes to driving a team forward and delegating tasks. They can’t be shy about taking charge, making decisions and directing others. There is always something changing in the world of business, and so strategic thinking is key, as making changes quickly ensures that the business can keep up with others in the industry and the demands of a target audience.

Hiring and Firing Senior Executives

Though it’s by no means one of the more enjoyable aspects of being a CEO, leaders are responsible for hiring and firing senior executives. However, they are rarely involved in other staffing decisions at large companies, especially those lower down the ranks, which tend to be taken care of by recruitment managers. In a business, a CEO approves or handpicks the senior team whose vision helps shape the company. This is an important job, as senior executives can make a business what it is, and they play a big part in how successful it is. If a CEO hires or fires the wrong people, it could have big consequences for the company as a whole.

Communicating with Shareholders and the Public

A lot of people work together to manage, grow and develop a business, and a CEO is responsible for communicating with everyone involved in the process. This involves shareholders and stakeholders, ensuring that everyone is kept up to date with changes, developments and projects. As the face of the company, a CEO is also expected to be accountable and represent its values. This means communicating with the public, especially during times of change and evolution.

Considering how much a CEO does, it’s easy to see why having one is so important to a business. The CEO acts as the focal point for the governance of a business, making them accountable to the board of directors, shareholders and other stakeholders as far as business performance and adherence to legal standards are concerned. The CEO ensures transparency, effective communication and compliance with regulatory requirements at all times. Without this input, there is a risk that the business could overlook a key regulation or underperform.

The CEO also sets the tone for the company’s culture and values. They are responsible for fostering an inclusive and productive work environment, attracting and retaining top talent, and developing leadership within the organisation. Without a strong and trusted CEO, existing and potential employees are unlikely to view the business as being a company worth pursuing. The CEO’s leadership style and commitment to employee development can have a significant impact on morale, productivity and engagement.

A CEO is responsible for assessing and managing risks that may affect the business’ operations and reputation, something that a successful business cannot do without. They need to be adaptable and responsive to changing market conditions, technological advancements and competitive landscapes. The CEO’s ability to navigate uncertainty and lead the company through change is vital for its long term viability within the industry.

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