Chief executives are responsible for the overall operation of a company or organization and have titles such as chief executive officer (CEO), executive director, managing director or president. They establish the company's objectives and policies in collaboration with other top executives, including overseeing the budget and making sure the company's resources are effectively used. A CEO also facilitates business outside of the company. The chief executive officer reports to the board of directors. Other types of chief executives include chief operating officers (COOs), chief financial officers (CFOs), and chief human resources officers.
Day in the Life of a Chief Executive
Top executives lead organizations in almost every industry. They work for both small and large companies, ranging from companies in which they are the only employee to firms with hundreds of thousands of employees. A CEO's responsibilities depend on the size of the company. For example, the owner of a small independent retail store, may purchase inventory, and hire, train and supervise employees. By contrast, the CEO of a large company typically focuses more on developing policies and strategy, while the company's general and operations managers direct day-to-day operations.
Depending on a company's size and industry, its chief executive might handle the following duties on a typical day:
- Establish and direct department and company goals, strategies, policies, operations and procedures.
- Consult with other company executives, staff, and board members about general operations.
- Advise and inform the company's board of directors on key issues, such as recommending an annual budget for board approval.
- Direct the company's financial activities. This may involve analyzing the firm's financial statements, sales reports, and stock value.
- Manage the company's resources within the budget guidelines.
- Direct fundraising, planning and implementation.
- Oversee the design, quality, marketing and delivery of products and services.
- Negotiate or approve contracts and agreements.
- Ensure that the company's objectives, products and services are presented in a positive light to relevant stakeholders (such as consumers, investors, and the general public).
- Hire or appoint department heads and managers.
Most CEOs have support staff and large offices. They typically work long hours but have flexible schedules. Most chief executives travel frequently to review operations, meet with staff, customers and other executives and to attend conferences and meetings.
Important Characteristics for Chief Executives
Whatever their industry or the size of their company, successful leaders share what might be called chief executives skills. These top executives typically have excellent communication, interpersonal, leadership and organizational skills. An analytical mind, along with sound decision-making and problem-solving skills, enables them to work well under pressure. They display great leadership ability when coordinating policies, people, and resources. They are adept at managing their time, business plans, budgets and employees.
Typical Steps for Becoming a Chief Executive
The education, experience, and training requirements for CEOs vary widely, depending on the organization. Here are the most typical steps on the path to becoming a chief executive:
- Earn a bachelor's degree or graduate degree. While there isn't a "chief executives school," many CEOs have a bachelor's or graduate degree in law, business administration, public administration, liberal arts, or specialized areas related to their industry.
- Gain industry, company and management experience. Chief executives typically need extensive experience in management and a deep knowledge of a company's area of specialty. This experience can also results in the building and strengthening of chief executives skills. Many top executives rise through the ranks of their own company, advancing from lower level management or supervisory positions. In such cases, executives may be able to substitute experience for education. Some companies, however, prefer to hire qualified candidates from outside their company.
- Take advantage of company and industry management training programs. Some employees without a college degree can advance to higher levels in the organization. These candidates often take training programs and executive development programs for managers and executives hoping to advance. This type of training is offered by some companies and industry association groups.
- Earn a professional license, certification or registration. Some companies require that their chief executives hold a specific professional license, certification or registration. For example, some companies require their CEO to be a certified public accountant (CPA). Find out if your employer (current or prospective) requires any particular licenses, certifications, or registrations.
- American Management Association
- Financial Executives International
- Institute for Certified Professional Managers
- Top Executives, Occupational Outlook Handbook, 2016-17 Edition, Bureau of Labor Statistics, U.S. Department of Labor, https://www.bls.gov/ooh/management/top-executives.htm
- Summary Report for Chief Executives , O*NET OnLine, https://www.onetonline.org/link/summary/11-1011.00