The role of a Chief Executive Officer (CEO) in a company is essential. The CEO is the person that is responsible for directing the company and creating the overall strategy that is going to be implemented by all of the company’s employees.
A CEO may not be directly involved in the company’s day-to-day interaction, but they are responsible for the company’s image in the public’s eye. They are directly involved with the board of directors and external parties to find opportunities for collaboration.
In general, the CEO is the company’s conceiver. They are the ones who create the company’s strategic plan, build a positive company culture, and connect with other parties.
Continue reading below to understand the roles and responsibilities of a CEO!
Also read: Founder VS Owner VS CEO of A Startup, Here are The Differences
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Strategizing and directing the company
Roles of CEO
The CEO is the captain of the company. They are the ones who determine the company’s direction, when is the time to sail the ship or the time to get ready for the storm.
In the context of a company, a CEO has to build the company’s strategy and prepare backup plans in case the company encounters serious challenges. Afterwards, the strategy can be breakdown into the company’s policies. These policies will help the employee and the board of directors understand the business expectations in the short or long run.
Also read: Advantages of the Transformational Leadership Style in Startups
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Implementing the business plan
More than creating the strategy, CEOs are also responsible for the plan they have already made. There are follow-up steps they need to take from the initial business plan and strategy.
On top of that, the CEO needs to know how to communicate the business plan to all parties involved in the company to ensure that they can execute the plan well.
The final goal is to maximize profit, increase the company’s valuation for shareholders, and improve the company’s position in the market.
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Managing budget
As mentioned above, the CEO is barely involved in the company’s daily operations. However, the CEO is responsible for the company’s entire budget.
The Chief Financial Officer (CFO) will typically handle the budget management details. But the CEO will determine the yearly budget with some consideration, such as the company’s income, cash flow, and target valuation.
With the CFO’s help, the CEO will consider several industry variables to determine the expenses potential, revenue, and long-term profit. Then the CFO will handle the rest.
Also read: The Difference Between CEO and Director in A Startup
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Public relations
The next job of a CEO is to be the company’s representation in public. The CEO is the face of the company; thus, they represent the company’s brand image.
The public’s trust in the company highly depends on the CEO’s image. The CEO needs to keep a good reputation since it may impact the company’s well-being. As the company’s representative, the CEO must show a good attitude and morale that will positively impact the company’s reputation. Once the CEO make a mistake or do questionable things in the public’s eye, the company’s valuation may drop.
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Communicating with the board of directors
Roles of CEO
The board of directors is the CEO’s best friend or worst enemy. To keep them on the good side, the CEO has to communicate every business decision they’ve made, the good ones or the bad ones.
They have to do routine meetings to keep the communication line open. This is the chance for the CEO to deliver any news regarding the company’s interests as transparent as possible.
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Overseeing the company’s performance
This is the main role of a CEO. The CEO can make the right decision by looking at the revenue growth data, the company’s profit, and sales. These decisions are the basis for the company’s new Key Performance Indicators (KPI) that are more suitable for the company’s next target.
On top of the company’s performance, the CEO also has to oversee the changes in the market, such as acquisition potential or the industry’s regulation change. This is done to adjust the company’s business plan in the future. It will also help the company face external challenges and achieve its long-term goals.
Also read: Chief Executive Officer: Definition and Roles
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Building the company’s culture
The company’s culture portrays the organization’s values and will determine how the employee should behave in the company’s name.
For instance, do the team and leader’s relations have a strict hierarchical relation, or is it more flexible? Another example is the company’s dress code. Does the employee have to wear formal suits or casual attire?
CEOs need to understand the culture they are trying to implement in the company to increase the employee’s performance. For startups, typically, the culture goes like this: the work hours and the location are flexible, casual dress code, and non-hierarchical relations between the employees.
Also read: 7 Ways on How to Improve Employees Quality of Work
Positive work culture will also create a fun and conducive working environment so the company’s values, visions, and goals can be reached.
Well, that sums up the CEO’s roles and responsibilities. From the outside, people may think that the CEO lives a fancy life with private jets, luxurious residences, and fancy restaurant dinners. But behind all that glam, there are huge responsibilities with high risk.
Because when the CEO takes a wrong turn, they harm not only themselves but also the company’s credibility and reputation.
