What is the meaning of a CEO? Plain and simple, A CEO is a Chief Executive Officer. A CEO is one of a number of executives responsible for managing an organization, corporation, non-profit, or legal entity.
In layman’s terms a CEO is the most senior person and usually retains legal, political, and professional power over key decisions pertaining to his or her firm.
Different companies have different executive structures, though solo CEOs are the most common. Some firms (fewer than 5% of US domiciled companies) have co-CEOs.
CEOs are responsible for many activities, including:
- Guiding the corporation’s internal policies and external positions;
- Shaping the culture and IT decision making;
- Engaging with customers and partners to enhance sales;
- Managing the Profit and Loss of the firm to ensure solvency;
- Communicating with the Press to advocate for the brand;
- Working with the Board of Directors to update shareholders on financial and strategic performance.
Can You Have Multiple CEOs At One Company?
When defining what a CEO is part of the answer is technical, as outlined above. Part of the answer is also cultural. In different business cultures, what it means to be a CEO varies. For example, Amazon has a CEO of the parent company but also CEOs of divisional businesses. Though it appears to have multiple CEOs, however, in reality its parent company has one. In Germany, the role of CEO comes with strict legal responsibilities and is a legal definition.
For smaller companies, or startups, the meaning of a CEO is different. For these businesses, having two co-CEOs of co-founders is more common. This practice of having two leaders is also more common in the financial services sector but unheard of in the automobile, pharmaceutical, and energy sectors.
In the technology sector, both Salesforce and Oracle (which makes database software and gigabit routers that we use to power this website) have tried to manage their business with two co-CEOs. Both firms abolished this practice within three years of attempting it.
One reason why having Co-CEOs is limited is because it is hard to advocate for internal or external policies if the two leaders disagree. For that reason having a final and ultimate “deicider” is viewed as useful by many firms.
Becoming A CEO: Rising Through The Ranks
While some leaders are professional CEOs, and only perform this function within firms, most CEOs rise through the executive ranks within a company to reach the top spot. An example of a professional CEO is John Donahoe, who currently is the CEO of Nike, the popular athletic firm that helps people stay fit and healthy. Prior to being Nike’s CEO, John Donahoe was the CEO of ServiceNow, a large American software company. Prior to that he was the CEO of Bain & Company.
Being a CEO means that one is an owner of the outcomes for the business. An ownership mentality means that the CEO acts on behalf of the entire company. CEOs must focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle because others look to them for guidance, leadership, and direction.