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CEO: What do they do?

CEO: What do they do?
What is a Chief Executive Officer?

A Chief Executive Officer–better known as a CEO–is an individual who holds the highest-ranking position in an organization. The CEO (or Managing Director in the United Kingdom) is the most prominent position in a corporate office; the CEO is in charge of total management of the business model. In the majority of business organizations, such as a public corporation, where the company shares its profits with shareholders, the CEO will report to the board of directors.

The board of directors acts as the looming authority and regulator for a CEO; this committee establishes the specific responsibilities which the CEO must fulfill. Although the board of directors, is in essence, the overseer of a particular company, the CEO in most instances, will be required to handle the day-to-day operations of the particular business. 

What are the basic responsibilities of a CEO?

As stated above, the responsibilities of a corporation’s CEO are typically set by the organization’s Board of Directors or other authority, depending on the business’ legal structure. In general, the responsibilities of a CEO may be far reaching or somewhat limited based on the culture, hierarchy and nature of the organization.

In a typical sense, a CEO has the responsibility of a chief communicator, decision maker, leader and manager of the company or organization’s day-to-day business operations. As a communicator, the CEO will be required to inform the press and general public of the basic company dealings, including their earnings reports, mergers and acquisitions, large business deals, company layoffs etc. Furthermore, the communication role of the CEO requires the individual to actively inform the organization’s management and employees of the aforementioned dealings, as well as additional company-specific dealings.

As a leader of an organization, the CEO is required to advise the board of directors of the company’s outlook and initiatives. Furthermore, the CEO is required to perpetually motivate his or her employees to drive change within the organization. As a manager, the CEO will preside over the organization’s day-to-day, month-to-month, as well as year-to-year operations.

CEO in the United States:

In the United States, and in business, all executive officers of an organization are regarded as the top officers of the business; the CEO is the best-known and most powerful of these officers. The definition of a CEO in the United States may vary based on jurisdiction; for example, the California Corporate Disclosure Act defines all executive officers as the five most highly-compensated individuals who do not maintain a position on the board of directors.

It must also be understood that the role of a CEO will differentiate based on the structure of the business. For instance, in the case of a sole proprietorship, a CEO will function as the Sole Proprietor, while in the case of a partnership; the CEO will act as a managing partner, a senior partner or an administrative partner. And lastly, in the case of a limited liability company, a CEO will act as any member, officer or manager of the business.