The Chief Executive Officer (CEO) is the highest executive rank in the company. Depending on the company’s constitution, CEOs are elected by the Board of Directors and the company's shareholders. The CEO makes major corporate decisions, manages the company's operations, and acts as the focal point of contact between the corporate operations and the Board. Along with the chairperson of the board, the CEO also represents the public face of the company. CEOs play a huge role in a company’s performance, with some studies suggesting that the CEO influences 45% of the company’s performance. Typically, they deal with all high-level strategic decisions that impact the company’s growth. The roles and responsibilities of a CEO may depend on the size, structure, and culture. Sometimes the CEO may be serving multiple positions in small organizations or start-ups. They may act as the Chief Financial Officer (CFO), Chief Operating Manager (COO), or even the Chairperson of the board. Although the separation of roles is advisable for maintaining smooth business operations, it might not be affordable for small organizations in some instances.
The Board and the CEO
The CEO and the board chairperson can work together to define a robust board agenda that could help the company thrive for years. The board members play an essential role in creating a strategic framework for the company. The CEO’s responsibility is to help the board members play a valuable role in such strategizing. Here are some of the ways CEOs can help broaden the board’s scope:
In the digital age, all board members must be familiar with the latest advancements in technology. Sometimes, board members might require digital literacy to improve their digital skills. To stay at the top of innovation and competition, the board of directors must be digitally skilled. The CEO can reflect on the digital skills that are most relevant to their business and encourage the board to increase their digital literacy.
As a CEO, you can get your board involved in defining and establishing an effective corporate environment and culture. Most boards play a significant role in CEO succession, even nurturing and training potential CEO candidates. However, boards are also well-positioned to focus on talent development in their company. The CEO can encourage them to play an active role in decisions relating to essential hires and appointments.
In most cases, the chair and the CEO represent the public face of the company. But most successful companies see customer engagement as the entire organization's responsibility. Therefore, they involve board members in marketing as well. With social media expansion, viral videos, and changes in public relations, effective marketing and communication are a must for any successful company.
To increase the involvement of board members in the company’s business operations, CEOs should develop a dynamic business agenda that is forward looking and highlights the most important activities. Further, the agenda should be set in a way that provides sufficient time for those activities to take place. The best boards are those that look for continuous improvement in every meeting while keeping the long-term business goals in mind. It is recommended not to put a lot of things on the meeting agenda for a single day because that will only overwhelm the board. Instead, develop a concise and effective agenda that covers the most important matters.
Top CEOs see boards as their biggest allies. As a CEO, you must build good relations with the members of the board and seek advice whenever necessary. You should create a professional and friendly environment, so that board members look forward to the board meetings. This means that you have to make board meetings meaningful, engaging, effective, and productive. There will be times that CEOs will disagree with the board’s decision on certain matters. In such cases, they must handle the situation with utmost respect and professionalism. They should be willing to compromise in some situations while taking a stand on mission-critical issues.
In summary, the CEO plays an important role in the board room as they are responsible for a robust meeting agenda, that serves to engage and motivate the directors and board members. The CEO thus ensures that the individual needs of the board members are met while managing relations with each of them. In principle, the CEO is the backbone of a company and vital for its short- and long-term success.