What is a CEO? (Including duties and salary information)

By Indeed Editorial Team

Published 7 December 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Chief executive officers are high-ranking professionals in an organisation or company. CEOs have several responsibilities that contribute to their high salaries and job requirements. If you want to be a CEO, it can be valuable to know which business management skills, qualifications and corporate experience can help you to be successful. In this article, we answer ‘what is a CEO?' and outline what their general responsibilities and salaries are.

What is a CEO?

If you're interested in becoming a CEO, you're probably wondering, ‘what is a CEO?' A chief executive officer (CEO) is the most senior executive in a company. Their actions govern how the company operates as they oversee managerial decisions and serve as the public face for the company. Some CEOs might be executive directors, presidents, or managing directors. The primary aims of a CEO are to explore expansive opportunities, manage the company's resources and set goals and deadlines for managers to strive towards in daily operations.

A CEO is answerable to the board of directors – an elected group of individuals who represent shareholders. They ensure that the board of directors stay up to date on corporate operations and may turn to them for matters concerning revenue or budgets. Several individuals operate under a CEO – including managers, directors and other c-level officers. A CEO may call on these individuals for advice or guidance, yet the ultimate decision-making process is solely theirs.

Related: Chairman vs. CEO: what's the difference between these roles?

How much does a CEO earn?

The national average salary for a chief executive officer is £54,667 per year. Salaries may vary depending on the type of company they work for, geographical location and the size of the company. The amount of experience you have and the size of the company you work for can also impact your total earning potential.

Related: Managing director vs. CEO: what's the difference?

What does a CEO do?

In smaller companies, CEOs take a more hands-on approach by getting involved in day-to-day functions and communicating with general colleagues more directly. The company culture and corporate structure can also have an impact on what a CEO does. Some general responsibilities include:

Making high-level decisions

Large corporations require CEOs to primarily deal with important strategic decisions that impact the company's growth. These decisions can relate to the company's budget, culture, market strategy, or other factors. For cross-functional strategies, a CEO may determine how to allocate funds between teams to give them the best chance at success.

Implementing the company's vision

CEOs implement the company's vision and mission at every business level. This means accounting for these two factors when making decisions and reminding employees to act per the company culture. If a strategic plan takes an unexpected turn and acts in tandem with the company's values, then the CEO may make an executive call to abandon the project or change its direction. To properly implement the company's vision, its aims and values are clearly defined and vocalised to all employees.

Assessing risks

Risk is an inevitable part of corporate operations. CEOs assess any risks associated with new business operations and work to minimise them where possible. This sometimes requires them to forecast different ways a project can develop and come up with efficient solutions for each potentially negative outcome.

Leading c-level officers and working with management

As a chief executive officer, make sure you have good leadership skills to delegate work to other c-level officers and direct their responsibilities. Upon making important business decisions, a CEO ensures that other officers carry out appropriate work in line with any changes or new directions that arise. CEOs account for short and long-term actions when assigning work to management or officers and ensure that new aims filter down to all personnel.

Watching industry changes

A CEO maintains constant vigilance when it comes to market competitors and new opportunities. They make note of any changes in the industry landscape and explore potential areas of expansion or investment in emerging markets. For example, if the company reaches a saturation point with its current target demographic, the CEO may consider changing demographics or introducing a new product or service that could re-capture the interest of the existing demographic. Thorough research and preliminary data collection are vital for making these decisions.

Overseeing the organisation's budget

Once a strategic plan is in place, the CEO works alongside executive management to determine an appropriate budget. This budget accounts for the cost of capital and resources that allow teams to achieve their aims and requires a forecasted view of profits to ensure that the return rate is surplus to the initial budget. Some departments may receive a higher budget than others or the CEO might choose to disband some groups that aren't producing returns or that are unnecessary according to the new financial aims. CEOs usually get budgets or funds approved by the board of directors.

Serving as the company's face

CEOs communicate with government entities, shareholders, the media and the public on behalf of the organisation. This means they serve as the fact of the company and attend most in-person events to represent the company's interests or brand. CEOs attend interviews, press conferences, video calls and host their own events on an occasional basis. When launching a new project, CEOs may also be responsible for overseeing press releases and speaking to internal employees on the new direction of the company.

Determining ways to improve performance

The primary aim of a CEO is to save money and grow current revenue. This requires close communications with shareholders to potentially outsource production or dispute current contract terms. CEOs may also look for ways to streamline the production process to make operations more efficient and boost product or service output.

Related: COO vs CEO: understanding the difference

What skills do CEOs use?

Chief executive officers need a combination of hard and soft skills to be successful in their roles. Most CEOs learn their skills through education and experience, yet it's important to be aware of these skills beforehand so you can focus on targeting them on your CV or throughout your career. Some essential CEO skills include:

  • decision-making skills

  • verbal and written communication skills

  • interpersonal skills

  • leadership skills

  • problem-solving skills

  • analytical skills

  • organisational skills

  • creative thinking skills

  • collaborative skills

  • teamwork skills

What is CEO change?

When a new CEO takes over the company from another, it's a CEO change. Markets can have a positive or negative response to this transition in company leadership since the new CEO can significantly impact the company's current performance for better or worse. Negative responses are more likely to occur with an unplanned transition. For example, a CEO change may lead to a fluctuation in the company's stock price, initiated by the market's perception of the new CEO.

The market's perception of a CEO changes based on how familiar the new leader is with the dynamics of the company's industry and the challenges it faces and its record for generating shareholder value. With a new CEO comes an immense amount of change to several company aspects, including policies, departmental structures and the company's vision. Here are four steps a new CEO may take to enact these changes:

1. Take inventory of the business and employees

As a new chief executive officer, spend time getting to know your employees and alleviate any uncertainties they may have regarding your arrival at the company. Some CEOs choose to bring their own teams in that they trust and ensure these new company members settle in properly. They may speak to established employees to get their opinion on what's working and what needs changing on a day-to-day business level and outsource or merge departments based on this feedback.

2. Identify quick wins

Identifying quick wins allows new CEOs to overcome the negative perceptions associated with company reorganisation by having a quick positive impact on the market. In most instances, new CEOs enact policy changes that they think can improve revenue and company growth. Where these new changes contribute to measurable success, investors feel more comfortable backing new CEOs.

3. Fix communication gaps

Outsourcing or merging departments can impact the company's communications. As a CEO, it's your responsibility to put new processes in place that facilitate collaboration and communication between departments. Cross-functional departments are a common feature of corporate businesses and only through a high level of communication can they succeed. A CEO may coach leadership teams on how to implement new communication processes and increase their office hours to allow management to ask questions.

Related: 9 questions to ask a CEO when you have the chance

4. Realign with the company's vision

CEOs have an idea of a company's vision and values. Where the former CEO has resigned due to insubstantial results, the new CEO usually changes the company's direction and implements new strategies that align with the company's vision. This may include putting greater emphasis on new values over others and letting go of employees who seem to be uncooperative with the new company aims or responsible for the underwhelming results.

Salary figures reflect data listed on Indeed Salaries at the time of writing. Salaries‌ ‌may‌ ‌‌vary‌‌ ‌depending‌ ‌on‌ ‌the‌ ‌hiring‌ ‌organisation‌ ‌and‌ ‌a‌ ‌candidate's‌ ‌experience,‌ ‌academic‌ background‌ ‌and‌ ‌location

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