What it Means to Be a CEO: Responsibilities and Traits

Being a CEO is not about fulfilling duties but rather about shouldering rights and responsibilities. It is a position of immense power and influence, requiring a unique blend of leadership and management skills to guide a company to success. This article explores the core responsibilities of a CEO, distinguishing between managerial and leadership traits, and highlights the tangible and intangible benefits that come with this role.

Core Responsibilities and Rights of a CEO

Contrary to the misguided belief held by some social commentators that CEOs have a moral obligation to pursue social objectives such as ending racism, hunger, and global warming, anyone who has reached the CEO level is focused on financial performance and making their investors better off. While there may be ethical obligations, the primary task of a CEO is to drive the company towards profitability and growth.

The CEO as the Head Cheese and Authority Figure

A CEO is often referred to as the “head cheese,” the ultimate authority within the organization. The Articles of Incorporation outline the duties, responsibilities, and powers that a CEO and other C-suite members hold, though these can vary widely depending on the specific corporation. The Board of Directors has significant control over these roles and can grant special powers to any officer, further emphasizing the flexibility of the CEO's role.

Visionary Role and Harmonizing Ideas

At its core, the CEO's role involves setting the vision and mission for the organization. This vision should not just be a lofty ideal but a clear roadmap that aligns with the goals and values of the company. The CEO then works with their team to break down these goals into actionable steps, working towards a shared target. This requires a harmony of ideas that can foster innovation and growth.

Perks and Challenges

While the position of CEO comes with perks such as travel opportunities, this often comes with the challenge of being away from home or the office. However, these are choices that the CEO can delegate, ensuring a balance between work and personal life. The responsibilities and tasks assigned to a CEO can vary greatly depending on the size and type of the company. A CEO of a large multi-billion dollar corporation has to be a mega-manager, while the founder of a small business may need to wear multiple hats and be a super leader.

Managing vs. Leading: The Traits of a CEO

The responsibilities and tasks of a CEO are deeply rooted in the concepts of management and leadership. A CEO is typically a manager, with a focus on control, risk management, consensus-building, and managing multiple powerful constituencies. Here are the key traits of a manager:

Risk Management: The CEO must control risks, avoid them wherever possible, and ensure that the company remains financially stable. Multiple Constituencies: The CEO must manage relationships with the board, large clients, government, and other stakeholders to maintain a harmonious environment. Consensus-Based Decisions: Decisions often involve collaboration with key stakeholders and require a balance of viewpoints for the good of the company. Chaos Management: The avoidance of chaos and maintaining order are paramount. Even missing out on opportunities is more acceptable than making a mistake. Hiring, Firing, and Promoting: The CEO has the authority to manage the leadership and talent within the organization, which is a significant responsibility.

On the other hand, the CEO is also a leader, with a clear vision and purpose that resonates with the organization. Leadership involves inspiring and guiding people to follow the CEO, understanding that the CEO has limited authority because they need the team more than the team needs them. Leadership requires:

Clear Vision: A CEO must have a clear and compelling vision that aligns with the company's goals and values. Willing Followers: People should willingly follow the CEO because they trust and believe in the vision and direction. Building Trust: Earning the trust of the team is crucial for a CEO to build a strong, effective team. Innovative Thinking: The ability to think critically and innovatively to overcome challenges and find solutions. Building Relationships: Maintaining positive relationships with key stakeholders is essential for long-term success.

Ultimately, the success of a CEO lies in their ability to strike a balance between management and leadership. By effectively managing risks, maintaining relationships, and leading with a clear vision, a CEO can guide their organization to long-term success and profitability.