Chief Executive Officer (CEO) is the highest position in the management of a company, both large and medium-sized companies. Behind the success of a company, of course there is the contribution of an extraordinary leader who has talent and of course is able to develop good responsibility for running a company.
The CEO has his own responsibilities, duties. Usually, the CEO has a higher salary than other positions, of course because the CEO position is the highest position in a company. The position of a CEO can be obtained by ownership of shares, competence, social ties or by direct official appointment.
The CEO will act as a decision maker in the top management of the company. What roles should the CEO have? And how much is the salary of a CEO? Check out the following explanation!
Definition of Chief Executive Officer (CEO)
Chief Executive Officer or CEO is the highest position of a company and has responsibility for the success of the business being run. In general, the CEO is selected by the board of directors as well as the shareholders.
In business activities, a CEO is entrusted with managing the entire company, making important decisions and acting as the main point of communication with the board of directors as well as shareholders.
In addition, the CEO has a role that varies from one company to another and depends on the size of the company, culture and structure of the company.
Generally in large companies, the CEO only has business with high-level strategic decisions and all matters related to the overall growth of the company.
For example, the CEO will plan the business strategy and determine the operational decisions of top management. Meanwhile in smaller companies, the CEO often has a more active role and is involved with the day-to-day functioning of the company. For example, the CEO will be involved in recruiting staff and helping with relatively small business projects.
However, basically, the CEO is more involved in strategic matters such as meetings with the board of directors or other important meetings. According to a study from Harvard Business School, as much as 72% of CEO work time is spent on meetings.
Usually, these meetings will produce various plans and strategies to be able to develop the company’s business. Apart from carrying out tasks related to work and business, a CEO is also considered the face of the company he leads.
This makes most CEOs definitely have a large social circle and are recognized by many people. An example is Elon Musk, who is currently synonymous with Tesla.
If Sinaumed’s often sees in the media, Elon Musk often conducts interviews and appears on TV and radio shows and attends various events. This shows that a CEO does not only work within the scope of his company, but also must build a good image in the public about his company.
Difference between CEO and Director
In some companies, there are those who equate the position of CEO with managing director. However, there are also companies that have a CEO and also a managing director. In this case, the director has a role as executor of the running of the company and must report to the CEO.
So, a company may have several directors, but only one CEO. Then, what is the difference between a CEO and a director? Basically, a director is someone who heads up several departments headed by a manager.
The Director has an obligation to report back on these matters to the CEO and ensure that every plan has been implemented properly. The director also has the duty to manage different departments.
Meanwhile, the CEO is someone who has full responsibility for the running of a company that he leads. So it can be concluded, that the CEO is the owner of the plan for a business trip from the company, while the director is someone who implements the company’s strategy.
The role of the CEO in the Company
After knowing what a CEO is and who a CEO really is, did Sinaumed’s know that CEOs do not only have a big responsibility, but also have a big role in the development of the company. To be clearer, here are some of the roles of a Chief Executive Officer or CEO.
1. Designing business objectives
The first role of a CEO is to develop a company’s business plan and evaluate the profitability of the business plan. In addition, the CEO also has an important responsibility for monitoring the performance of the departments and divisions that report to him to ensure that his performance is in line with the company’s vision and mission.
2. The CEO acts as a company representative
Being a CEO means he becomes the main face of a company that is led. So, it can be said that the CEO is the main face of the company. Therefore, the presence of a CEO in the public eye has a considerable impact on the public’s perception of the products or brands and companies that the CEO leads.
3. Build a solid team
Even though the CEO has an important role to play in building and advancing companies and businesses, of course the CEO cannot do the job alone. For this reason, CEOs have directors or positions that are below.
The people who are under the CEO will then be formed as a team. In order to carry out the task properly, the team must also be solid. However, a solid team does not just appear.
Therefore, the CEO has a role to bridge employees with company directors. The CEO must also be able to build a comfortable work environment, so that solidarity will be formed in the team.
4. Allocating a spending plan budget
A company certainly requires a certain amount of funds and capital to keep the business running well. These funds need to be planned in the spending plan budget.
The CEO and other executives have a role in preparing the budget. Budget spending plans cannot be planned haphazardly, but require a long process of analysis and evaluation.
The goal is to make the budget allocation more focused. Furthermore, the risk of profit or loss from a company will be the responsibility of a CEO.
CEO Duties and Responsibilities
In addition to these four roles, the CEO also has duties and responsibilities. However, the duties and responsibilities of a CEO do not have standard boundaries. But in general, here are some of the duties and responsibilities of a CEO:
- Communicate on behalf of the company with the government, shareholders and the public.
- Lead the development of short and long term strategies for the company.
- Creating and implementing the vision and mission of the company and organization.
- Evaluate the work of other executive leaders in the company, including the president, vice president and directors.
- Maintain company performance in competitive market situations, industry developments, expansion opportunities and others.
- Ensuring that the company can maintain high social responsibility.
- Assess the risks in the company’s planning and ensure the company is properly monitored.
- Establish long-term strategic business goals for the company.
Skills a CEO Must Have
Does Sinaumed’s have aspirations to become a CEO? Anyone can become a CEO, as long as they have the competence and ability to lead a company. In order for a company to run well and continue to grow, the CEO must have the following abilities.
1. Leadership
Leadership is a basic ability that must be owned by every CEO, even for the manager class though. There is also this leadership ability that is very closely related to the CEO’s position as a company leader.
With leadership traits, a CEO will look convincing when making a decision that is important for the continuity of the company. In addition, the CEO must also have the ability to handle conflict management well, as a form of representation of the leadership spirit of a CEO. so, this will certainly affect the trust of employees and also stakeholders.
2. Be assertive and able to make decisions quickly
According to the Harvard Business Review, a high-performing CEO usually doesn’t always stand out, because they have to make big decisions all the time.
Conversely, if there is a CEO who stands out, the CEO usually has a firm attitude. A CEO also has to do it consistently, even in the midst of ambiguity with complete information and even in an unfamiliar environment.
A CEO must also be prepared to accept the risks of the decisions he makes. So, people with a firm decision-making attitude are generally more likely to become a good performing CEO.
3. Good communication skills
A CEO must have good communication skills. This is of course inseparable from the activities of a CEO who will often meet with many people.
The communication that exists between a CEO and these people is not solely to convey a good message, but the communication that is established must also have context with the interlocutor.
For example, when a CEO talks to employees, he must be able to use language that is concise and easy to understand. With this, employees will easily understand the reasons for the CEO when making certain decisions.
4. Creativity and innovation
As Sinaumed’s knows, it will be difficult for a business to survive long if the company cannot innovate. Therefore, as the first person and the most important position holder in the company, a CEO must have creativity and be able to innovate.
The goal is for companies to adapt to the latest trends. A CEO must have the ability to think creatively and welcome new, innovative ideas.
That way, he can keep the business relevant as well as progressive. A CEO who values change with an open mind, then he will easily determine the business direction for his company.
5. Ethics
A CEO is not only responsible for the internal affairs of his company, but also has responsibility for the public’s view of him.
The more successful the business he runs, the higher the public attention he gets. This shows that it is important for company leaders to have good ethics, to be responsible when something goes wrong involving their company.
The inculcation of this honest and responsible culture will also affect the performance of the company he leads. If a CEO is known for his good ethics, then the public will also put their trust in the company he leads.
6. Collaborate
A CEO of course will not be separated from the name of interaction. To manage a company, a CEO can work with various parties. This collaboration can be established between the CEO and the board of directors, heads of departments, managers and colleagues.
For this reason, a CEO must have a variety of good plans and ideas in order to advance his company. By working with employees and colleagues, of course a CEO will get various creative ideas and solutions.
According to Stacey Hanke of Forbes, if a CEO allows his employees to be involved in various decisions by collaborating, then various kinds of ids can emerge and an employee will feel that he owns the company.
This of course will encourage employees to be involved in the success of companies whose ideas come from themselves.
7. Transparency
According to Forbes, one of the factors that can affect the trust of employees and executives is transparency or openness. When employees believe that a CEO is not hiding any information or failing to act openly, then employees will begin to question the decisions made by the CEO.
A successful CEO will realize that transparency is very important for employees to see performance and understand the motives for every decision they make.
8. Have good interpersonal skills
A CEO must have good interpersonal skills. These interpersonal skills include the ability to communicate with the public, listen to opinions, have high empathy for other people and others.
This is of course inseparable from the activities of a CEO who will often meet with many and establish relationships so that the company can progress and develop.
9. Have managerial skills
This managerial ability is related to the management of all resources and work systems that exist in the company. With good and effective management, the business can run smoothly and increase sales.
In addition, a CEO must be able to coordinate and mobilize his subordinates. So, employees and themselves are able to achieve the goals set by the company.
10. Have the ability to analyze
To be able to make decisions, a CEO must have the skills to be able to analyze a problem. A CEO must be able to see the whole problem, diagnose, analyze and find creative solutions.
This one skill will help the CEO to predict the obstacles that he might face and be faced by his company.
CEO salary
Curious about how much a CEO is paid? The base salary of the CEO and CTO depends on the funding stage of the startup. A CEO’s income will increase in accordance with the funding successfully obtained.
In Indonesia alone, the average salary per month for a CEO is at the funding stage of around US 0 to US$ 5 billion or around IDR 29 million. The data was released by venture capital firm Monk’s Hill Ventures and employment startup Glints in their report entitled The Southeast Asia Tech Talent Compensation Report.
Thus the explanation about the Chief Executive Officer (CEO), is Sinaumed’s interested in business and wants to become a Chief Executive Officer (CEO)? If so, then Sinaumed’s can get skills to become a businessman by reading books.
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Author: Khansa