So I work for a large bank in the United States. Me and my coworkers always joke that whenever something bad or inconvenient happens it’s the CEOs fault. Though it’s just a running joke it got me thinking, on a day to day basis what does a CEO actually do? I get the “Chief Executive Officer” nomenclature means they more than likely make executive decisions but what does that look like? Are they at their desk signing papers all day? Death by meeting?
Edit: Holy crap thanks for all the answers I feel like this sub always pulls through when I have a weird question. Thanks guys!
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If the company was a ship the CEO is the captain. They ultimately decide who gets to be on the ship, where the ship should head, and what they plan to do when they get there.
Obviously for a big company, there are tasks that need doing that the CEO cannot do by themselves, or require expertise the CEO does not have. So they hire people to do that for them, and the CEO tells them the high-level overview of what they need to get done so the whole company can be moved in the direction they want it to move.
For a hypothetically small company, a CEO could maybe do this job directly 1-on-1 with every hired person. But in almost every case, any company large enough for us to even be talking about CEOs in the first place is so large that there’s no way in hell the CEO is going to be able to personally direct *everyone* like that. So they hire middle management positions to do it for them. Like little mini-CEOs responsible for a specific sectioned-off chunk of the company. The CEO tells them what the CEO wants. The middle managers then decide how they’re going to accomplish that and steer their department by telling their underlings what they want done, and so on, until you work down the chain of command.
The monkey’s paw in all of this is that when you delegate responsibility to someone below you like that, you have to get constant feedback to know that they’re on course. That is usually delivered in the form of meetings. So, a very large company’s CEO is pretty much gonna be death by meetings of endless status reports on the health of different sectors of the company, as reported by the CEO’s underlings, and deciding when to take action and what actions to take based on those reports. They have to be vigilant that the people they entrusted in middle management to keep an eye on whatever chunk of the company is doing their job correctly. Otherwise, that chunk of the company could fail, which could domino effect into the CEO failing.
That would be bad for the CEO, because despite being head of the company in basically every way, the CEO *does* actually have a boss to answer to: the owner. The owner literally owns the company and, within extent of the law, can do basically whatever the flip they want with it. Thing is, though, that the owner may not be cut out to be a leader in the way a CEO needs to be. Moreover, if the company is publicly traded, the company would likely have owner**S**, and a lot of them. Too many cooks in the kitchen is not a good thing, and the owners know it, so they’d prefer to hire one dedicated leader to captain the ship, and give that leader the keys to the kingdom to be able to do it on the owners’ behalf. That’s what a CEO truly is: a leader-for-hire. And like any hired help, they can be fired, too.
Outside of death by meetings, another somewhat unwritten duty of some CEOs is to broker business partnerships with other companies. In typical top 0.1% fashion, this can involve a lot of schmoozing over fancy dinners and drinks, brushing shoulders with other top brass at other powerful leaders, and shaking over informal deals in smoky backrooms (oh, and more meetings, of course). I don’t want to paint a picture here that CEOs are somehow breaking their backs over cushy cocktail parties, but the names of the game in leadership are connections and appearances, and a lot of it is tied to all of that pageantry.
Honestly this is a difficult question to answer. There are some overlaps and common denominators, but the exact responsibilities of a CEO vary from company to company. At some companies they are basically workaholic dictators who control and even micromanage the roles of everyone below them. At others the CEO is nothing more than a figurehead, the public face of a company that is actually managed by the board of directors and they don’t really do much beyond public appearances. Most companies though, fall somewhere along a spectrum between these two extremes.
I read other comments and when I read “set the direction of the company”, I get irritated ‘cause it’s so vague, it doesn’t explain sh!t.
So we are clear that the title CEO does not describe the skills/tasks/expertise of the job but only describes the authority of the person.
So what a CEO foes depends on the experience/skill of the CEO, on the type of business, on the size of the company, and other factors.
If you are a tech engineer and founded a tech company, you are in theory CEO from day 1 but it is a bit ridiculous to use that title when your company has less than 10 people. Anyways, to make the company grow you: 1) code a lot and 2) hire smart people to help you coding and 3) hire people to do other stuff like marketing. As the company grows you do less coding and become more of either a dev Architect or more likely you become more of a Product Manager as your focus will shift more on building features to make your software better. You are still spending time hiring, and you spend time managing teams telling them what to do (coordinating people takes time). Even if you hired an accounting firm, you’ll still need to do some paperwork. If your business relies also on partners, you might spend time making presentations, sending emails and having meetings. Etc.
So you see that a lot depends on the CEO skillset, type of business, and size of the company. There is some constants though. A
CEO will always need to spend time doing the following: 1) hiring the top people in the company 2) managing teams (how you do that depends on you… top managers report to you, or you have regular meetings with presentations, or you just have daily sync ups, etc.) 3) business development (emails, meetings, presentations to find partners) 4) paperwork (legal and accounting)
The only thing a CEO needs to do is try to make sure the company meets the board of directors requirements. Since the board of directors are almost always big shareholders in the company this generally means increasing profitability. So almost every CEO will try to implement some 2-5 year plan about how to change the company to expand in new markets and increase profits. Then they need to spend all their time making sure other executives follow the plan, placating the board when something inevitably goes wrong and attend meetings all over the world about investments and shit.
If a company is a car, the wheels and tires are the “regular employees”, the managers (the ones that actually are useful, anyway) and other c-level people are the brakes, the transmission, suspension, batteries, all the other critical parts… and then there is the engine. That’s the CEO. Car can’t go anywhere without the engine.
Well, I guess it can go down hills without the engine. And if the car has been running already and speeding down a flat highway, it will go as far as it can until friction and air resistance stops it. So the analogy still holds up; company can only go so far without a CEO until it has to ask itself “what are we supposed to be aiming for and how do we get there?”
Death by meeting, which includes assault by PowerPoint. Talking to customers and asking good questions. Reading, including industry news, social media, and briefs prepared by staff. Memorizing things, like talking points for meetings. Preparing for speeches and important meetings, in particular by learning about the people who will be there. Going through numbers with the CFO. Signing things in consultation with the CLO.
Everyone is answering in terms of what the job description is, but I think it’s more helpful to understand where this role/title comes from, and so why it can be very different from company to company.
Modern Western corporate structures are all based primarily on European Parliamentary systems. Except instead of one person, one vote, it’s one “share,” one vote.
Here’s why:
Say that you and me, plus a couple friends, want to start a company together. It’s going to cost $100k to get it going. But we don’t all have exactly $25k each. I have $50k, you have $25k, and our two friends only have $12.5k each. We all want a say in how the company works because it’s our money, but it’s unfair to say all four of us should have equal say.
So instead, we create “shares” and hand them out proportionately. I get 500, you get 250, and our friends each get 125 for example. Then we “vote” with those shares on what the company should do.
Now as the company gets bigger, maybe more people want to invest money in us and get some shares, and thus votes, into what the company does with that money. Maybe it’s 100 people, all with different amounts they can invest. It’s not practical to call a full vote of every shareholder on say… every person we hire. Or what color stapler to buy. Maybe all of us *have* full time jobs already.
So instead, we have one big vote once a year (or so) among all the shareholders (voters) to elect a set of representatives, like a Parliament. This is the Board of Directors, who’s job is to represent us. But it’s also not practical for that Board to vote on every little decision the company makes either — just the big stuff. (The “laws,” so to speak.) So just like a Parliament, the Board itself then votes on a Prime Minister to delegate authority to about *how* to run the company day to day.
This person is responsible for *executing* the Board’s decisions. And so this person is called the Chief Executive Officer, or CEO. (There is nothing special about this title — the President of the US is referred to as “chief” officer of the “executive” branch too.) Just like a Prime Minister, this person then hires/appoints cabinet ministers, like a Treasury Secretary (Chief Financial Officer), who then hire and manage their own departments. Depending on the company’s rules, they may or may not need a Board vote to confirm other cabinet (Chief “X”) members.
Just like different countries, certain companies give their CEOs total authority on everything. Others give them relatively little authority and Board vote on everything. It often depends on how much political influence a CEO has with each Board member. CEOs with a lot of success, charisma, or political pull with shareholders tend to get a lot more leeway.
CEOs are given 2-4 year (or so) terms, and then the Board votes on CEO again. If the Board doesn’t like them, they lose the vote and thus their jobs. If the Board doesn’t hold them accountable, or votes against the shareholders’ interests, then the shareholders vote to replace the Board at *their* next general election.
CEOs usually demand a certain amount of autonomy during their term, because they might need to make decisions that are unpopular, and don’t want to run every little thing past the Board. And so just like a chief executive of a country, it is often very hard to get rid of them between each election. They do this by requiring a very high vote margin *and* a huge fee to break their contract (basically “impeach” them) before the next elections — i.e. a “golden parachute.”
So the role of a CEO in a company is to “execute” the decisions of the Board. But what those decisions actually are is wildly different from company to company, and depends a huge amount on the company’s bylaws and how much pull/autonomy the CEO has with the Board members and shareholders.
CEO of small company of around 70 employees. I try to talk to my managers at least once every day or two. Accounting, HR, Sales, and production. What’s going on in their world and what problems are they facing. I try to look for trends. If sales are slow one day no big deal. If sales are slowing three months in a row… big problem.
Im constantly looking at least 6 months to 2 years in the future. What do I want the company to look like in two years? Is our main market going to be viable in two years? What markets are small now that we can get into that will grow over the next few years? What do we need to do over the next 6 months to compete in those markets?
It’s all about patterns and then making decisions to best respond to those patterns. For example during Covid when supply chains were crap I was having daily meetings with purchasing and accounting about what could we get, what could we not get, could we afford to triple our inventory over the next 6 months because we may not can get it after that for a while… we don’t have space to triple our inventory. We need to rent a building to have the space. Who can we rent 15k square feet from for only 1 year?
My day is trying to prevent problems months before they happen or capitalize on opportunities months in advance. Sometimes I feel as though I do nothing all day and sometimes I’m fighting a dragon alone that no one else can see.
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Think of it like this: how do you know what to do at your job? The answer: your boss tells you what they’re paying you for. So how does your boss know? Their boss knows. But how does the person at the top know? They don’t. They make it up. That’s what the CEO does. They make up what everyone else’s jobs are.
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