The job description of a CEO is a blueprint of what the CEO is expected to do in a job. It includes the ideal candidates’ attributes to perform successfully in such a role.
The structure of the job description of the CEO has the overall purpose of the role and primary duties.
The primary purpose deals with what the CEO will do in the job. The third portion of the job description of the CEO showcases what the CEO must possess or bring to the job for them to be successful. This includes Knowledge, Skills, Abilities, and Other characteristics. The CEO is ultimately accountable for the success or failure of a company.
The job of a CEO and what goes into the job description vary by the nature of the industry and the organisation’s size. The mandate of CEOs of large organisations tends to focus on highly strategic issues. In contrast, small- to medium-sized organisations include significant operational work.
In this article, I cover what you need to include in the job description of the CEO and samples of what must go under each section.
Job description of CEO: Activities versus results
A job description will often be written in two formats: the first will define the duties and responsibilities of the position. In contrast, the second format will describe the desired outcomes of the position.
Some advocate for a simple job description that does not detail the tasks the CEO has to do but a broader overarching responsibility. Such a description allows the CEO to find means to achieve the desired results within the limits of the authority delegated to them. For example, The CEO will have to do whatever is needed to achieve ends and comply with executive limitations.
The CEO makes all decisions, formulates all policies, and gives authorisation for all activities, provided that they can demonstrate to the Board that they are appropriate.
Under this omnibus kind of role description, the CEO must demonstrate that the decisions and actions taken are consistent with a reasonable interpretation of the Board’s ends and executive limitations policies.
Job description of CEO: The overall purpose of the job
Under this section, you capture the core mandate of the CEO job in a summary form.
The job description of the CEO should be so clear under this section that no stakeholder is left in doubt as to what the CEO’s mandate is.
The CEO (chief executive officer) is the highest-ranking executive in a company.
The CEO is responsible for leading the company, overseeing all business units, planning for the future, and ensuring that the company is performing well and achieving its goals. The CEO’s primary role is to set the company’s strategic direction and make sure that the company’s goals are accomplished.
The CEO is ultimately responsible for crafting the business’s strategy, which covers the financial, business systems, customers, and staff working for the business.
Ultimately, the CEO should ensure that the business wins in the marketplace and make the shareholders happy by bringing an optimal return on shareholder funds.
The overall purpose of CEOs of large organizations is to lead in developing and executing a winning strategy for the organisation. Usually, the decisions a CEO can make are limited by the laws of the country and international best practices.
The decisions made at this level are superior to any other decisions. Only the Board has the power to redirect the decisions of the CEO.
In large organisations, the CEO’s job involves integrating several independent business operations. This is often the case in roles such as Group CEO.
In small to medium organisations, the job description of the CEO includes dealing with the organisation’s strategic direction but also touches on operational issues.
CEOs are responsible for providing a company with overall guidance on all strategic and operational issues, regardless of the organisation’s size. This responsibility falls on their shoulders.
Job description of CEO: The primary duties of a CEO
Under this section of the job description of the CEO, you list all the core duties the CEO performs. Remember that the CEO role is strategic and rarely goes into operational issues if the role is pitched correctly.
The CEO must be highly aware of the diverse economic, social, political, technological, and religious environments to grow and protect shareholder value.
They often oversee profit and loss in one or several strategic business units and assess their overall value as reflected in the corporate balance sheet.
A company’s CEO performs various functions, including strategic planning, raising money, and representing the company to the outside world.
They are the ones who get the final word on all significant decisions. They make input into critical operational decisions.
One of the primary responsibilities is to ensure the company remains profitable, which means finding ways to increase revenues and cut costs where possible.
The job description of a CEO includes dealing with mission-critical issues that impact the organisation’s operations. As they make vital decisions, they often pay attention to global, national, and regional environments, specifically building the organisation’s capacity to respond to environmental changes.
The CEO is responsible for activities and decisions materially influencing the organisation’s survival.
This is why such roles require astute candidates in strategy formulation and implementation.
Decisions at this level may only impact the organisation five to ten years in the future. A poor decision at this level may threaten the future well-being of the entire organization.
The CEO at this level may be required to anticipate and establish new unified business systems that serve society’s future needs. This is accomplished through alliances, mergers, and acquisitions.
The critical consideration is how value can be established and enhanced across the business.
The decision-making process is geared to meet critical business drivers, which are sustained profit and wealth creation for the long term, while contextually considering social, environmental sustainability, and ethical issues.
These are issues that can not escape the attention of the CEO in the globalized village.
The work primarily focuses on building sustainable wealth in its most general meaning. The CEO must secure investment money and actively manage image, reputation, and financial issues to build confidence in the business’ complicated web of relationships.
The CEO provides a dual perspective, one that looks outside to secure the company’s long-term existence and another that looks within to establish and maintain working conditions ideal for the internal stakeholders.
This is the highest organizational level where key strategic decisions and choices are made.
It is the level at which the rules of the game for the following decade are intentionally decided.
Individuals operating at this level will be required to operate outside their functional area and give equal weight to several other functional areas. It does not matter what background the candidate has in functional areas. What matters is the ability to lead the whole organisation.
Work at the level is focused on formulating an organisational strategic intent, which may be defined as expressing a desired and attainable future position. This is the core of the work being done at this level.
They monitor the profit and loss and evaluate their overall value as reflected in the company’s balance sheet.
They analyse the asset needs of the business to determine whether or not there should be an increase or decrease in investment in light of the long-term strategic thrust of the business. The most important thing for a CEO is to ensure that the company meets its goals and objectives.
In some cases, the CEO may be responsible for all aspects of the business, including financial performance, human resources, marketing, and product development. In other cases, the CEO may delegate these responsibilities to other senior management team members.
The duties and responsibilities of a CEO vary from one organisation to another.
However, the following are the typical duties and responsibilities associated with the position: Setting the company’s vision and strategy, making significant decisions, managing operations, and resources, and serving as the Board of directors’ principal point of contact.
Below I list some of the core duties that a job description of a CEO should contain.
λDecides the overall strategic direction of the business.
λ Decides what policies are needed to support the strategic direction of the business.
λ Coordinates the economic, social, technological, or political contexts for the entire organisation.
λ Determines significant policy setting constraints for the business.
λ Sets the organisation’s financial and social direction, including the enterprise’s viability.
λ Oversees profit and loss for the business and its subsidiaries.
λ Determines the objectives for corporate investment and divestiture.
λ Assesses the value of current technologies and seeks new ones.
λ Develops human capital capabilities to enable the business to be sustainable.
λCreates an enabling environment to enable all critical stakeholders to participate in the company’s operations.
λEngages critical external stakeholders to create opportunities for the enterprise.
λ Ensures that the firm and its products or services have a positive image in the public eye and work to promote and preserve that image.
λWorks with the Board to promote good corporate governance practices throughout the organisation.
λAct as the lead person in promoting social responsibility interventions in liaison with the community.
λ Leads in building and sustaining a performance culture within the business.
λDevelops mechanisms to manage risk throughout the business.
λDevelops mechanisms for tracking the progress of the strategic goals and feedback to the Board.
λ Provides overall leadership to the organisation.
λ Develops and monitors the implementation of the company’s succession plans for critical roles.
Job description of CEO: CEO job education requirements
To become a CEO, one must typically have a college degree in business, economics, or a related field. CEOs typically have significant experience working in management positions.
Many CEOs began their careers working in entry-level jobs and worked their way up through the ranks of their respective organisations.
The job of a CEO is one of the most important and demanding jobs in a company. A CEO needs to be highly educated and experienced to succeed.
The education requirements for a CEO vary depending on the company and the position, but a CEO typically needs a bachelors degree in business or a related field.
Many CEOs also have a masters degree in business administration (MBA) or a related field.
Despite the demand for college degrees as a minimum requirement for CEOs, scientific research shows that years of education have a significant but weak relationship with actual job performance.
When hiring CEOs, it may be beneficial not to overemphasize academic achievements.
Job description of CEO: Experience Required
At this level, candidates must have experience extending beyond their domain expertise. For this type of role, candidates need to have a broad awareness of global, regional, and local events and trends.
It necessitates considering things from several angles and incorporating a wide range of concerns and requirements for the company into a comprehensive strategy.
In the job description of CEO, does experience matter? Research shows that experience does not predict performance that much. Therefore, understanding what experience is required to succeed as a CEO is critical.
Instead of focusing on the number of years a candidate has been leading at the highest level, it may be critical to focus instead on the diversity of leadership experience the candidate brings to the job.
Job description of CEO: Knowledge, Abilities, and Other Characteristics
The CEO level optimizes leadership. Leadership in this context can catalyze influence on various diverse groups, whether within or external to the organisation, a rival, or a strategic partner.
There has been debate on whether domain knowledge is needed to be a successful CEO. There are divergent views on this. On the one hand, others believe that your domain knowledge is less important as you ascend into a CEO role.
Instead, your soft skills and the ability to rally employees and other stakeholders toward the company vision are critical. It seems evident that those aspiring to lead the organization as CEOs need to develop a generalist mindset instead of domain-specific expertise.
The CEO role requires a strategic thinker capable of engaging in broad, complex, analytical conceptual thinking. The CEO must be driven to improve the company by attracting and developing top talent.
Critical thinking is a signature competency for the CEO. This same competency feeds into the other strategic competencies required for a CEO.
Conclusion
The job description of a CEO is a crucial tool required in hiring the right CEOs. Every Board that aspires to get the best CEO must have an accurate job description for the CEO. Globally, companies lose an estimated USD112 billion dollars due to the wrong selection of the CEO.
Boards tend to look for subordinates when hiring instead of leaders.
Women are 28 times less likely to be picked for a CEO role for various reasons that have nothing to do with performance.
All these challenges emanate from poorly designed job descriptions which Boards use to hire the wrong CEOs.
As you develop the CEO job description, note that individuals targeting to occupy CEO roles must be capable of working outside their experience paths.
They must be inclined to work effectively within the hierarchical structure of their company. Leaders at this level can only succeed if they recognize the significance of the knowledge and achievements of others.
A humble estimation of one’s abilities is crucial in this role. At this level, humility is desirable, and it is important to acknowledge that others possess specific expertise essential to success. When regularly exposed to high levels of attention and opportunity, even the most modest person may be tempted to inflate their ego.
This article on CEO job description was first published on the thehumancapitalhub.com
Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm.Email:mnguwi@
