Mark Zuckerberg, Mary Barra, and Elon Musk – some of the world’s most famous business people are CEOs of their companies. But what is a CEO and what are their responsibilities?

Read on for everything you need to know about CEOs, from where they fit in the company hierarchy to how to become one.

What does CEO stand for?

CEO is a shortened way of saying Chief Executive Officer – the head of an organisation.

Sometimes CEO stands for other job roles such as Chief Education Officer or Chief Engagement Officer, but generally it refers to the most senior executive in a company.

What does CEO mean?

The CEO is usually a company’s highest-ranking member of the board. If the business has a Chairperson (representing the board), the CEO will report to them.

Although the CEO is not necessarily the owner of the business, they’ll have a high level of responsibility but also a high level of influence on the company and its workforce.

CEOs get support from other board members, as well as senior management executives such as a Company Secretary, Chief Operating Officer, or Chief Financial Officer.

The ultimate goal for most CEOs is to make sure the business is running smoothly, while also helping it to become more successful.

What does a CEO do?

If you’re a CEO of a business, your responsibilities will vary depending on the size of the company and the business sector it operates in.

However, the vast majority of CEOs will be responsible for leading the company, making business-critical decisions, and overseeing day-to-day operations.

Here’s an overview of some of the key responsibilities undertaken by CEOs in the UK:

being the face of the business – whether it’s communicating with investors or the wider public, the CEO is usually the company’s main spokesperson
taking charge of the bigger picture – this means making sure the business has a plan of where it wants to go and how it’s going to get there
delegating key tasks to senior management – having a strong management team can help the CEO to focus on growing the business, getting key updates as and when they need them
setting targets and implementing strategies – working with senior management and the board, the CEO will be responsible for key decisions such as new product launches or recruitment drives
assessing risks and understanding market trends – knowing the challenges the business is facing while keeping an eye on competitors is an important CEO duty
fostering the culture of the company – an effective CEO will have a firm grasp of the values of the business and how they’re implemented

An example of a CEO’s responsibilities

Here at Simply Business, our UK CEO is Alan Thomas. He joined the business in 2016, with over 20 years’ experience in the insurance industry.

Alan’s role as UK CEO means he’s responsible for overseeing the growth and culture of our UK business – keeping us aligned to our long-term vision and strategic priorities.

We believe that no two people – or customers – are the same, and Alan’s role is to make sure our culture, proposition, and values reflect this.

Central to this is a belief in our unique values, and an emphasis on enabling the big dreams of our customers and people.

What’s the difference between a managing director and a CEO?

The job roles CEO and Managing Director are often used interchangeably, but there are some key differences.

Here’s an overview:

Managing Directors are more involved in the day-to-day operations of the business, while the CEO oversees everything
CEOs are more likely to make big decisions and have ultimate responsibility for the performance of the business
CEOs are usually more public-facing. For example, they’ll be the spokesperson for PR campaigns and external communications
Managing Directors are unlikely to report to shareholders or communicate with investors. This is usually a responsibility of the CEO

Atstock Productions/stock.adobe.com

How to become a CEO

If you own a small business, you may prefer to be known as the Owner rather than the CEO.

However, if your business starts to grow, it could be beneficial to move to a conventional company hierarchy with a CEO and senior management. This could help to improve structure and increase accountability.

If you own a small business, there’s nothing to stop you being the CEO. However, it’s important that you show the following skills:

leadership
delegation
innovation
decisiveness
accountability

Becoming a successful CEO can take years of practice and it’s useful to have experience in different areas of business.

If you want to improve your senior leadership skills you could take a course, such as the University of Oxford’s Executive Leadership Programme or the Happy Workplace CEO and Senior Leadership Programme.

Meanwhile, you can apply for the government’s Help to Grow scheme. It offers small business owners the chance to improve their management and strategic skills during a 12-week course.

How much does a CEO earn?

The average annual CEO salary is £55,000 for a starter, rising to £150,000 for an experienced CEO, according to the government’s National Careers Service.

How much a CEO earns depends on the size and success of the business they’re working for.

CEOs typically work 37 to 48 hours a week and are often required to work evenings and weekends to attend meetings or events.

Top tips for your small business

Whether you’re known as the Owner, CEO, or Managing Director, if you run a small business you’ll need to do everything you can to make sure it runs smoothly.

With this in mind, here are some useful resources to help keep your business on track:

What are your top tips for being a successful CEO? Let us know in the comments below.

Photograph 1: Anatoliy/stock.adobe.com

Photograph 2: Atstock Productions/stock.adobe.com

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What does CEO stand for? A small business guide