Just what are his job responsibilities? Does he add any value to whatever his companies product is?
geez…company’s
IMHO, they smile and wave at other CEOs they know from grad school while their underlings contrive ways to rip off the employees.
Seriously, have you ever seen the Monty Python sketch about the Upper Class Twit of the Year? Seems accurate to me!
Being a CEO’s great because:
You get to wear the uniform,
You get to wear the medals,
And you sit on the handlebars
While everybody pedals
From what I’ve seen, a CEO signs things.
Based on what I’ve experienced, a company president looks after the daily running of the company. But the president reports to the board of directors, which is headed by the CEO.
It’s the CEO who runs meetings of the board, who signs reports approved by the board, and who basically speaks for the board, on behalf of the shareholders. It may be the CEO who handles the proxies of the shareholders who ask him or her to, and thus, the CEO can also direct the company through the proxies.
Again, based on my experience, a CEO doesn’t add much value directly to the products of a company. But he or she does add a lot to the company, in the eyes of investors and potential investors. Of course, statements that later turn out to be false or fraudulent can return to bite the CEO, as various recent business failures can attest to. There is a lot of responsibility in the position, and it should not be seen (as it sometimes is by boards) as a sinecure or as a reward.
Well,
For a factual answer, CEO’s generaly chart the companies long term stratagies. A good CEO can do amazing things for a company. A bad CEO can sink a company.
A military analogy works well. Generals in the Military know a little bit about how every thing works. The Generals job is to pick the battles and apply the forces to gain as much as possible. The same thing goes with CEOs.
To give you an example. I worked at AOL when AOL went to unlimited access for $20 bucks a month. For the first three or so months it was hell. The network couldn’t handle that much traffic. Users were really pissed. Steve Case, the CEO, made some choices and threw a huge amount of money to get the problem fixed.
Case made the right choices and AOL thrived after. Case, to fix the problem, gave into some short term losses (we gave away free months during the problem like they were going out of style) to get a long term gain (retaining members).
If you really want to know about this area I am sure there are some books you can pick up. Lee Iaccoca (SP?) comes to mind.
Slee
There is no single job description for CEO.
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Salesman. Many small companies founders hire a CEO to sell products or services while they do the interesting work. Usually these companies are about to go bankrupt. Qualifications: sales skill and experience in the business sector. Pros: profits within three years. Cons: your most cantankerous techies will leave within 2 years; after success is attained in 5-10 years, the CEO must be replaced with a strategist, but it will take a bloody political fight that could kill the company if the board of directors is weak or lacks experience.
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Fund raiser. Dreamers who smoke IPO-crack to wake up in the morning are likely to hire a CEO with connections in the business/VC community to raise venture capital. These companies are often started by a high-energy promoter who is completely blind to his/her own weaknesses. Qualifications for the Fund Raiser CEO: connections (capital “C”), friends, and charisma. Pros: closing a venture capital deal for many millions in cash that keeps you alive; toss a coin to know if it will result in a IPO, and if that IPO makes your life better rather than much, much worse. Cons: stacks the board of directors with friends and incompetent (but famous) trophy directors; usually the Fund Raiser CEO has no idea how to manage or even evaluate the company operations. Chances of surviving the IPO without a new CEO are minimal.
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Visionary celebrity. Much has been written about celebrity CEOs. Qualifications: fame, charisma, strong verbal ability, narcissism. Best avoided. This CEO management style has the same Pros as replacing the company’s morning coffee with scotch. and at least as many Cons. It’s surprising how many companies forsake their business sense for the rush of celebrity.
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Integrative manager. Companies seeking this CEO want someone with experience and expertise to solve company problems and to push the company into incremental successes. Qualifications: knowledge or background in most aspects of the business; common sense; ability to listen and learn; willingness to take charge by bringing out the best in people. Pros: builds the company morale, solves problems no one else would tackle, creates a reasonable blueprint for the future. Cons: more interested in creating honest business success over the long term than in trying to impress well-heeled friends. Okay, that’s not really a bad thing.
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Accidental CEO. All the founders and key executives are appointed. The underperforming genius who created the company (and probably has a Ph.D. or such) is still boss, so can’t be fired, but can’t be allowed to continue to mismanage his staff. So he gets “promoted” to CEO, while a competent manager gets the job of President. Massive fights between the two are inevitable. The CEO will get fired eventually.
There’s more, but it’s late.
All this is based on personal experience (true stories).
As I wrote this, I see a couple excellent replies have already been entered, but I’ll add mine as well, not because it adds much, but because I’d hate to type for no reason…
Well, if this is a serious question, a CEO steers his (or her) company. His direct reports run specific areas of his company, and he balances the needs of each of these reports, tries to get the best results from each of them, and when necessary settles conflicting needs amonst them. Basically, he manages as any other manager at any level in an organization, except that he has ultimate day to day authority in running the company. I say “day-to-day”, as he typically reports to a board of directors, who report to the shareholders, and if he doesn’t perform as well as his bosses expect, he can be replaced like any other employee.
Every company is different of course, but in my world (high-tech), his typical reports will run Research and Development (VP of Engineering), Marketing (VP of Marketing), Sales (VP of Sales), Finance (Chief Financial Officer), and (depending on the business), Operations (VP of Operations). Each of these members will operate their departments, and occasionally look to the CEO to sort out conflicts.
Additionally, the CEO is the leader of the company, and as such sets a tone inside the company of how things are, exemplifies the culture in other words. Also, the CEO will portray an image of the company externally, as he is the face of the organization to the rest of the world. Often this involves some fanfare, as ultimately it is the job of the company to make money, and attracting attention is an important part of that.
Spoons, the position you’re describing is the Chairman of the Board, not the CEO.
Glad to see that we’re sticking to factual answers in GQ.
Having been an Executive Officer for several companies, including one publicly traded one, let me take a stab at it:
The CEO is the Chief Exective Officer. This means that they are the most senior executive in the company (which is entirely different from the Board of Directors, assertions above notwithstanding). The President is generally responsible for the day to day operations of the company, which is why that role is often combined with Chief Operating Officer (COO). The President reports to the CEO, who is ultimately answerable to the Board for all aspects of the company’s business. The Board, headed by the Chairman, represents the ownership of the company.
Jeezus. The Board of Directors of a company is elected by, and supposedly represents, the shareholders. The BOD is headed by the Chairman of the Board. This may be the same person who is CEO, but this is most emphatically NOT the CEO’s job.
Jeezus. The CEO is an employee – he is HIRED by the board. He MANAGES the company. He reports TO the board.
Proxies are exercised by whoever the shareholders assign them to. This might be the CEO, the Controller, the Chairman, the Corporate Secretary, any member of the board, or any other shareholder. The board normally makes the CEO the default, that’s all.
CEOs come in many flavors, and their role in the company is determined by management style. A strategic thinker may have a COO (chief operating officer) to do day-to-day stuff; a hands-on CEO might not need one. A financially-oriented CEO may have day-to-day accounting handled by a Controller; a CEO from the operations side might have a CFO to handle financial strategy. Some CEOs spend all of their time raising money; others spend all of their time pushing product design. Some CEOs appoint and head their boards; others work for strong boards headed by powerful shareholders or company founders. It all depends.
My mistake, Bill H., and thanks for the correction.
I’m learning a lot today. Nametag, thanks for the additional information. It’s not exactly how it’s been at companies I’ve worked for, though.
BTW, I want to address a particular part of the OP:
This is a strange concept that most people don’t really grasp, but a companys product and it’s features are actually a small part of what a company is all about. Some of the other key things to think about as a CEO:
Sales: ultimately, the product has to sell, and features exist for the sole purpose of generating additional sales. Often times better features don’t equate to better sales, and better sales are far more important.
Marketing: Perception and awareness of the product in the market are often as important or more important then the actual product.
Operations: Having an operational advantage, i.e. being able to pump out an inferior product quicker, cheaper, and/or in higher volume often beats out a superior product which is more expensive and difficult to obtain.
Finance: Ultimately, the CEO is responsible for generating high revenues and high margins. Managing money is very key, and product isn’t involved.
All this isn’t to say that having a strong product is irrelevant; of course it’s not. A great product is very key. But it’s not everything. It’s often not even the main thing.
I guess that idiot Michael Moore did a thing a while back where he asked the CEO of Ford if he knew how to change the oil in a car or some other lunacy. Which makes for good comedy (well maybe for some), but really misses what the value of the CEO is.
Fire as many people necessary to improve the company’s bottom line for whichever subsequent quarterly report.
That done, they then proceed to bleed a company white with their usual overcompensation and typical de-emphasis of crucial long-term employment. This assures a firm’s inability to rebound during an economic uptick. Fear not, they have carried their concern through a trough and could care less how it performs when economic recovery spikes.
Sometimes a CEO also takes the job of Chairman of the Board. This is not good, in my opinion. This practice is finally being widely recognized as bad governance. The two roles should be distinct – held by two different people.
A company that has CEO/Chairman in one person lacks proper checks and balances. The Chairman manages the Board, which has final authority and oversight for the company, and it is a job that too many companies don’t take seriously. A CEO/Chairman can cover up all kinds of mismanagement until its too late.
Zenster raises a topic which is interesting too. Indeed, another type of CEO is hatchet man, whose only job is to trim expenses by any means possible in order to raise quarterly profit statements. And, presumably, stock prices.
Regarding overcompensation, especially for underperformance, this is usually a result of this country’s inbred pool of directors, CEOs, and executives that support and feed each other. These guys (mostly guys) hire friends or celebrities, appoint each other to several Boards, and with a wink and a nod approve huge bonuses and salaries for each other. It is a club.
This is a bit off topic, but now when I see a company with many recognizable names on the list of chief executives/Board members, I immediately doubt the company’s honesty. There are career Board members who travel from company Board to company Board all day, pretending to oversee businesses they don’t understand. CEOs for larger enterprises are often scooped from this overfed pool.
Are a CEO’s responsibilities defined in Delaware state law? I’m sure that the rest of the officers would be described in generic terms, but there might be a requirement for on officer that reports directly to the board of directors.