What is A CEO?Entrepreneurs Programme
According to Investopedia, a chief executive officer (CEO) is the highest-ranking executive in a company, whose primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors (the board) and corporate operations and being the public face of the company. A CEO is elected by the board and its shareholders. Being on the top of the ladder is lonely. You can be friendly with your employees so that they are comfortable around you, but not too friendly as you still must maintain the integrity of your position. You can listen to recommendations and suggestions, but you alone make decisions. You are responsible for the livelihood of your employees, the safety of your investors’ money, and the growth of the company. You are responsible for your motivation and productivity. Your success is the success of everybody, your failure is yours alone.
A CEO's role varies from one company to another depending on the company's size, culture, and corporate structure. In large corporations, CEOs typically deal only with very high-level strategic decisions and those that direct the company's overall growth. In smaller companies, CEOs often are more hands-on and involved with day-to-day functions. CEOs can set the tone, vision, and sometimes the culture of their organizations. There is no standardized list of the roles and responsibilities of a chief executive officer. The typical duties, responsibilities, and job description of a CEO include:
- Communicating, on behalf of the company, with shareholders, government entities, and the public
- Leading the development of the company’s short- and long-term strategy
- Creating and implementing the company or organization’s vision and mission
- Evaluating the work of other executive leaders within the company, including directors, vice presidents, and presidents
- Maintaining awareness of the competitive market landscape, expansion opportunities, industry developments, etc.
- Ensuring that the company maintains high social responsibility wherever it does business
- Assessing risks to the company and ensuring they are monitored and minimized
- Setting strategic goals and making sure they are measurable and describable
The Difference Between CEO and COB
The CEO directs the operational aspects of a company; the board of directors oversees the company as a whole, while the leader of the board is called the chairman of the board (COB). The board has the power to overrule the CEO's decisions, but the chairman of the board does not have the power to overrule the board. Instead, the chairman is considered a peer with the other board members. In some cases, the CEO and the chairman of the board can be the same person, but many companies split these roles between two people.
The Difference Between CEO and CFO
The CFO is the chief financial officer of a company. While CEOs manage general operations, CFOs focus specifically on financial matters. A CFO analyzes a company's financial strengths and makes recommendations to improve financial weaknesses. The CFO also tracks cash flow and oversees a company's financial planning, such as investments and capital structures.
What Does It Take To Succeed as CEO of a Startup?
Successful CEOs share many qualities, but their responsibilities may differ based upon the industry they operate in and the business’ maturity level. Startups and established businesses don’t operate the same, and neither do their CEOs. For established businesses, CEOs focus on growing the business, increasing revenues, and gaining a competitive edge. Startup CEOs are usually leading the business from the very beginning, and they must establish these areas before they can expand them.
There are a few qualities that are especially important when leading a startup, including:
A startup CEO needs to be the ultimate salesman and to make others excited about a product, service or business, they must possess a high level of enthusiasm themselves. They need to be inspirational, motivational, and able to make others excited about the startup and its potential. When team members feel discouraged, a great startup CEO is able to stimulate them and get them back on a path to success. The entire organization will reflect the CEOs enthusiasm, so if they aren’t motivated for the business to succeed, other staff members will lack motivation as well. When they are enthusiastic about the mission, however, the rest of the organization adopts the same enthusiasm.
Early startups are fickle. The CEO and the organization must be able to adapt and pivot quickly and frequently. Effective startup CEOs learn constantly, seek advisement from others, and soak up new information like a sponge. It’s impossible to know how to properly run a business from day one, especially as a first-time startup CEO. The learning curve can be demanding, but a successful CEO reads books, follows industry news, and constantly seeks new information so they will be prepared to make confident decisions.
The road from startup to unicorn is a bumpy one and over 90% of businesses fail before they find success. Sometimes it’s unavoidable and the startup simply cannot continue, but other times its because the team gave up too soon. Successful CEOs are willing to persevere through hardships and stay committed even when things get tough. Much of the pressure will come down on their shoulders during hard times – investors will expect a turnaround, other members will look to them for direction, and their reputation as a business leader will be on the line. Even when all bets are against them, they must stay focused and continue to move the business forward.
Reasons to Separate the CEO and Chairperson Positions
In some cases, the position of Chief Executive Officer and Chairperson of the Board is held by the same person. Most organizations and companies permit the Chief Executive Officer to become the chairperson, which can cause a conflict of interest problems.
The two examples below show how a conflict of interest problem can arise if both positions are held by the same person:
- The Board of Directors votes on increasing executive pay. If the Chief Executive Officer is also the chairperson, a conflict of interest arises because he would be voting on her/his own compensation.
- The Board of Directors is responsible for evaluating the performance of executives such as the CEO. If the Chief Executive Officer also holds the position of Chairperson, she or he exercises the power to decide if her/his performance is satisfactory.
Therefore, good corporate governance usually prescribes a separation of duties between the Chief Executive Officer and the Chairperson of the Board. In the UK and other countries, it is forbidden by law for the CEO and Chairman of the Board to be the same person.
CEO Mentors in Malaysia
Get guidance from real, experienced mentors that are also Angel Investors. They have done IPOs/M&A and are Chief Executives levels only at NEXEA's Entrepreneurs Programme. This is Malaysia's exclusive peer network for top tech entrepreneurs to learn and grow together. Entrepreneurs are guided by some of the best startup mentors and investors. Joining their programme will allow entrepreneurs and startup founders to network with top entrepreneurs to learn and grow together. This is a unique experience created for top entrepreneurs only. Solve your business problems with peer entrepreneurs who have probably experienced similar issues. They use systematic methods to solve issues together. NEXEA has the strongest mentor profile in the country with people that own listed companies (IPO), done M&A, are CEOs/CFOs, or are ex-entrepreneurs that have successfully grown their companies regionally.
CEO - Skills & Competencies
To be successful in this role, you’ll generally need the following skills and qualities:
- Interpersonal skills: CEOs need to form good relationships with other leaders in the company and get significant input from the organization so that there is little pushback regarding strategic decisions and direction.
- Analytical skills: CEOs must participate in evaluating the success of the organization in reaching its goals. They must make sure that each strategic goal is measurable.
- Leadership skills: CEOs must demonstrate the leadership necessary to make the organization's mission a success. This includes providing vision direction, attracting followers, and all other aspects of successful leadership.
- Management skills: The CEO is responsible for creating a culture of learning to help enhance and grow the skills and abilities of employees. When significant players continue to learn and grow the organization truly succeeds.
Education, Training, & Certification
Education and training requirements vary greatly by employer and industry. Most employers prefer to hire CEOs with at least a bachelor’s degree and a considerable amount of work experience. Many companies prefer to hire from within the company rather than outside.
- Experience: CEOs usually need extensive experience in management, usually with a progressive amount of responsibility with each new position. In addition, companies often expect CEOs to have experience in the industry that the company is in.
- Training: Some companies require CEOs to complete training programs for executive development and leadership, as well as ongoing professional development.
A tech CEO in the industry who had a unique, but the clear vision is Apple co-founder Steve Jobs. Jobs founded Apple with a mission "To make a contribution to the world by making tools for the mind that advance humankind."
While CEO of Apple, the company developed products such as the Macintosh computer, the iPhone and the iPad, and revolutionized digital music revolution through iTunes. Job's ambition and vision transformed Apple into one of the world's most successful and influential by the time of his death in 2011.
The CEO is always the highest-ranking executive manager in an organization and has responsibility for the overall success of the organization, and is the ultimate decision-maker for a business. And, while the daily tasks of each chief executive vary, it is the overall vision of the position that provides the framework for the functionality of all departments.
Leading, guiding, directing, and evaluating the work of other executive leaders, including presidents, vice presidents, and directors, depending on the organization's reporting structure, is also part of the job. In the process of leading these senior leaders, the CEO makes certain that the strategic direction the CEO filters down through the organization to ensure its achievement.
Additionally, the CEO must ensure that the organization's leaders experience the consequences of their actions whether through reward and recognition or performance coaching and disciplinary actions. Without responsibility and accountability that is actively expected and reinforced, the CEO will fail to attain desired success and profitability.