Certainly, many of you are familiar with the CEO position, well-known as the highest position in a company, who is responsible for leading the organization to both success and failure in the business world. But what is this CEO position? What do these people do daily? How is it different from other positions? Additionally, if you’re an employee who wants to become a company CEO, how should you begin? Today, Sixtygram Agency will take you to find the answers and explain the role of a CEO for you to understand thoroughly.
What is CEO?
CEO is short for Chief Executive Officer. This is the company president or top executive who directly makes decisions and takes responsibility for all actions done in the company’s name. We can say that a CEO is the legitimate representative of the company who will lead the organization by choosing various strategies for business development. Additionally, the CEO coordinates between the Board of Directors and employees within the company.
Generally, a CEO is appointed through a vote in meetings between shareholders and the entire board of directors. This is because the CEO must be the most trusted person to represent the company in making important choices or decisions. However, since selecting a CEO is the most crucial decision made by the board, choosing an unsuitable CEO can severely impact the organization, including issues with governance, internal conflicts, and declining business results.
What are the duties of a CEO position?
The CEO or Company President’s main role is to manage company resources most effectively. This happens through making key decisions at the company-wide level. They also coordinate policy between the board of directors, senior executives (including CFO, COO, CTO, and CMO), and department heads. This ensures policies flow down to the smallest units – all company employees. This helps company goals and direction move forward in a single, unified approach.
Owner vs CEO
If you own a restaurant or run an online retail business, you might call yourself a CEO. However, the role of a CEO and a business owner is quite different. While some owners consider themselves CEOs, many are also shareholders and sole investors, bearing all business risks. In contrast, a CEO may not own shares, invest in products, or take on financial risks at all.
In large companies, the CEO is usually a professional appointed by the board or owner to lead the organization toward its goals. However, CEOs often receive company shares as part of their compensation or bonuses. In startups backed by investors, CEOs typically get around 6-8% equity in the company.
In small businesses or family enterprises, owners often act as CEOs themselves, as they deeply understand the business and want direct control. However, as the business grows, they may hire a professional CEO while shifting to the role of Chairman to oversee overall policies.
Therefore, being a business owner does not necessarily mean being a CEO. These two roles have distinct responsibilities, especially in terms of investment and risk management.
CEO vs MD
In large organizations, the roles of CEO (Chief Executive Officer) and MD (Managing Director) are clearly distinct. The CEO, as the top executive, focuses on setting the company’s vision and overall strategy while representing the organization in external affairs.
Meanwhile, the MD (Managing Director), some companies call the “President,” oversees daily operations and ensures within company. By the implementation of the CEO’s policies. The MD reports directly to the CEO and primarily manages internal affairs, such as supervising senior executives, coordinating business departments, and overseeing team operations.
CEO Vs CFO Vs COO Vs CTO Vs CMO
In a large corporate structure, besides the CEO and MD, there are several other key executives. Each position has distinct roles and responsibilities, including:
CFO
CFO (Chief Financial Officer) is the head of finance, overseeing all financial aspects of the company. This includes budget management, financial reporting, risk management, and financial planning. The CFO also plays a key role in providing financial insights for strategic decisions and acts as the main liaison with investors and external funding sources.
COO
COO (Chief Operating Officer) is a senior executive and acts as the CEO’s right hand. They oversee internal management to ensure the CEO’s vision is effectively implemented. The COO directly manages business units and ensures smooth day-to-day operations.
CTO
CTO (Chief Technology Officer) is responsible for overseeing all technology aspects of the company. This includes technology strategy, selecting appropriate technologies, and driving innovation to support future business growth.
CMO
CMO (Chief Marketing Officer) is responsible for planning and executing the company’s marketing strategy. This includes branding, marketing campaigns, corporate communications, and developing new products and services.
In the corporate hierarchy, the CEO is the highest executive, with the COO and CFO at a similar level and reporting directly to the CEO, these three roles work closely to ensure strategies are effectively executed and align with the company’s financial goals. In large or tech companies, both a CTO and CIO (Chief Information Officer) may be needed to separately oversee technology and information systems.
Essential Qualities of a CEO
Becoming a CEO is not easy, as no one is born perfect for the role. To succeed, a CEO must possess four key qualities:
1. Knowledge
A CEO must have deep business management knowledge, understand industry dynamics, and think strategically. This includes setting long-term goals and positioning the company to seize future business opportunities.
2. Competencies
Beyond knowledge, a CEO needs diverse skills, especially leadership and communication. They must inspire and lead diverse teams while building trust with stakeholders, including the board, investors, and external parties. Additionally, they must handle crises and communicate effectively on social media.
3. Experience
A CEO must have diverse experience suited to the organization’s challenges. They should have made critical decisions under pressure and adapted well to uncertainty. Flexibility, adaptability, and change leadership are essential qualities.
4. Personal Attitude
Attitude is the most important quality of a CEO, as it must align with the company’s direction, values, and culture. A CEO should have:
- Passion to drive the organization forward.
- Integrity to build trust inside and outside the company.
- Empathy to manage and support the team effectively.
- Public Mind to prioritize the greater good.
Developing into a CEO takes time and dedication. Leading organizations have leadership development programs to prepare executives at all levels and build future leaders. Aspiring CEOs should take advantage of these opportunities to grow.
Can an Employee Become a CEO?
The answer is absolutely yes. Many CEOs start as regular employees and work their way up, which is common in the business world. Large companies often promote executives from within, selecting those with experience and a deep understanding of the organization. Studies show that many CEOs began in entry-level positions and gradually advanced, while only 10% of CEOs at top global companies hold an MBA from a prestigious university.
One remarkable example is Jensen Huang, founder and CEO of NVIDIA, one of the world’s most valuable tech companies. His journey began humbly as a dishwasher at Denny’s before working at LSI Logic Corp. Over time, he gained experience, eventually founding NVIDIA, which has grown into a global leader in technology today.
The path from employee to CEO often starts with entry-level roles, gradually advancing to supervisor, department manager, director, and executive positions. Gaining experience in various areas—operations, marketing, and finance—is crucial. Working across multiple departments helps develop a well-rounded understanding of the business, especially in companies with diverse products and services.
When promoting an employee to CEO, organizations look for proven leadership skills. They assess a track record of successful team management, problem-solving abilities, business growth contributions, and strong collaboration skills. Employees aiming for a CEO role should demonstrate these qualities early in their careers.
For employees aiming to become a CEO, they should start by…
- Doing their current job well and delivering outstanding results.
- Seeking opportunities to learn from different departments.
- Volunteering for key projects to showcase leadership skills.
- Continuously developing management and leadership skills.
- Continuously developing management and leadership skills.
- Learning from senior executives through mentoring.
Although it takes time and dedication, rising from employee to CEO is not out of reach. With determination, continuous learning, and self-improvement, success is possible. Today, companies increasingly promote from within, as internal employees better understand the culture, values, and operations than external hires.
