We explain what a CEO is and how it differs from an owner and a founder. Also, what are their roles and responsibilities.
What is a CEO?
In the business world, the acronym CEO is used to refer to the CEO of a company or organization . This expression comes from English Chief Executive Officerwhich translates as “chief executive officer” and may also be known as general director, chief executive, executive president or general manager, among other valid terms in Spanish.
In layman's terms, the CEO of a company is the highest administrative and managerial authority of the organization, responsible for making the highest strategic decisions of the management of the company. In small and medium-sized companies, such as startupsthis position usually also falls to the founder and owner of the company, while in large corporations the CEO is part of the management positions supervised by a meeting of shareholders or the corporate board of directors.
These differences in the so-called corporate government can be better illustrated through a comparison with the functioning of republics: the CEO would become a kind of prime minister of the company, whose decisions, however, are supervised by the board of directors or the meeting of shareholders which operate as a kind of legislative power.
What is the difference between CEO, owner and founder?
Normally, the CEO is the highest administrative and managerial authority of the company, that is, he is part of the staff hired by the owners of the organization to guide its destinies, trusting in his expertise and his career in the business world.
However, The CEO is not necessarily the owner of the company he directs, since the owners in this case are usually the shareholders that is, those who have invested their money in the corporation and who at the end of the month receive dividends from it, not a salary as in the case of the CEO.
Finally, The founder of a corporation is the person who laid the foundation for the organization to begin operating . Initially, it is common for the founder of a company to be both its owner and CEO, but These three roles may well separate as corporations endure and they survive those who founded them.
For example, the Standard Oil Company was an American oil company founded in 1870 by John D. Rockefeller (1839-1937), which in 1911 was forced to legally split into 34 independent companies, one of which is today's Exxon (formerly was called Standard Oil of New York and Standard Oil of New Jersey). The latter is directed by Darren Woods, its CEO, and its owners are a group of companies: The Vanguard Group, State Street Corporation and BlackRock, mainly.
Roles and responsibilities of a CEO
The functions and responsibilities of a CEO are usually:
- Represent the corporation before the general public and before investors.
- Make management decisions of the company, especially with regard to its organizational policy and financial strategy.
- Advise the shareholders meeting regarding decision making at the highest level.
- Intermediate with the different actors involved in the life of the company, as investors, shareholders or large clients.
- Supervise (or elect) the management team optimal for company performance.
- in a company startup, create the company's vision and strategy and communicate it effectively to those involved.
- Chair the board of directors and ensure that there is a unified criterion among the directors or coordinators of each area of the company.
Who works alongside the CEO of a company?
The CEO can be understood as a general director of the company, that is, a director of the directors of each area, who has the mission of supervising them, keeping them in communication and imparting a single and uniform management criterion. In that sense, Those in charge of different areas of the organization usually work with him such as directors of operations, communications, finance, systems, among many others.
Desired skills in a CEO
There is no single formula to define a CEO, but in general the general director of a corporation is expected to possess talents and knowledge such as the following:
- Financial and managerial knowledge whether you have acquired them through study or through a successful career in the business world.
- Charisma and leadership ability to inspire workers and keep the management team in communication.
- Strategic and overall vision to make the best decisions at a strategic level and lead the company towards its goals along the best path.
- Business know-how that is, knowledge and experience in the business world that allows you to have astuteness and intuition.
- Communication skills to best transmit its message and its proposal to clients, employees and shareholders.
- Creativity and curiosity essential to be at the forefront of a competitive and changing world such as business.
CEO Examples
Some of the most famous CEOs today are:
- Jeff Bezos . Founder and owner of 7% of the online sales company Amazon, he is one of the richest men in the world and until 2021 one of the best-known CEOs. In that year, he handed over the executive management of Amazon to Andy Jassy, who currently holds it, in order to dedicate himself fully to the space company Blue Origin, of which he is also the founder.
- Sundar Pichai . An American computer engineer of Indian origin, he is the current CEO of Google, a company he joined in 2004. After almost 11 years of leading important projects for the corporation, such as Google Chrome and Chrome OS, in 2015 he held the position of CEO at just 42 years old.
- Tim Cook . American businessman and computer engineer, he replaced Steve Jobs as CEO of Apple after his death in 2011. Cook had joined the corporation in 1998 as vice president of Global Operations. Under his command, Apple doubled its revenue and pivoted towards an environmentally friendly business model with a high commitment to cybersecurity.
- Mark Zuckerberg . American computer engineer, founding member of the company Facebook and the social network of the same name, he is currently the CEO of the company and one of the youngest billionaires in the world. He is considered a very influential personality internationally due to the scope of his computer products, which has involved him in numerous controversies over digital privacy.
References
- “CEO” on Wikipedia.
- “What does CEO mean and what are the functions of the Chief Executive Officer?” at IEBSchool.
- “What is a CEO?” in JA Mexico.
- “Chief Executive Officer (Business)” in The Encyclopaedia Britannica.
