Chief Executive Officer (CEO) is a professional person in the company. He assumes responsibility of executive head. CEO is designated as General Manager, Managing Director, Executive Director, and Company President etc.
The CEO is selected and appointed by the Board of Directors and reports through the Chairman to the Board. The powers and authority of the CEO are delegated by the Board. The CEO is responsible for the attainment of the Company’s mission and business growth, profitability and service level objectives through leadership that inspires all the employees to efficiently and effectively execute strategic, tactical and action plans in accordance with the values that guide company's work.
The Chief Executive Officer is responsible for leading the development and execution of the Company’s long term strategy with a view to creating shareholder value. The CEO’s leadership role also entails being ultimately responsible for all day-to-day management decisions and for implementing the Company’s long and short term plans. The CEO acts as a direct liaison between the Board and management of the Company and communicates to the Board on behalf of management. The CEO also communicates on behalf of the Company to shareholders, employees, Government authorities, other stakeholders and the public.
The CEO has to play multidimensional roles, responsibilities and duties in the company. Out of these, following are the major role of the CEO in strategic management;
- Establish the company direction
The CEO has to play a role to lead, in conjunction with Board, the development of the company's vision, mission, goals and objective. The CEO leads and oversees the implementation of the Company’s long and short term plans in accordance with its strategy. He establishes the company's performance standards to unite the effort of diversified forces.
- Resource management
The CEO is responsible to manage the financial, physical and human resources. He has to play the role to ensure the Company is appropriately organized and staffed and to have the authority to hire and terminate staff as necessary to enable it to achieve the approved strategy. He ensures that expenditures of the Company are within the authorized annual budget of the Company.
- Monitoring and controlling
One of the important roles to be played by the CEO is to monitor and control the risk factor so as the company operates long lastingly. The CEO has role to assess the principal risks of the Company and to ensure that these risks are being monitored and managed; to ensure effective internal controls and management information systems are in place; to ensure that the Company has appropriate systems to enable it to conduct its activities both lawfully and ethically.
- Role of liaison and communicator
The CEO acts as a liaison between management and the Board. His responsibility is to communicate effectively with shareholders, employees, Government authorities, other stakeholders and the public. He has to play the role to ensure that the Directors are properly informed and that sufficient information is provided to the Board to enable the Directors to form appropriate judgments. He also has duty to ensure the integrity of all public disclosure by the Company.
- People management role
The CEO's duty is to ensure the effective management of the organization's people according the authorized personnel policies and procedures that fully conform to current laws and regulations. He should be proactive to encourage co-operation and collaboration; attract and retain people with the skills, competencies, attributes, qualities and characteristics to meet existing and future organizational requirements; and, sustain a work environment that encourages individuals to achieve personal and professional growth.
Hence, the CEO's role in strategic management is to,
- Drive the development and implementation of strategic, tactical and action plans;
- Oversee operations of the organization and ensure these are aligned with and comply with the Board approved corporate strategy, mission, values, objectives, policies and procedures;
- Monitor the external and operating environments for shifts or trends that may provide opportunities or threats for the organization and advise the Board accordingly; and,
- Ensure the Executive Team works in a self confident, trusting environment; sharing information; utilizing individual’s skills and removing obstacles to team performance.