What Is the CEO Role in a Business?

Updated 25 April 2023

A chief executive officer, or CEO, is one of the most important people in any organisation. Understanding the role of a CEO can help you appreciate how companies run and your own place in a business. It can also help you decide whether you want to become a company CEO in future. In this article, we explain what the CEO role involves and explore why these professionals are so important.

Why is the CEO role in a business important?

The CEO role is important because it is the highest-ranking role in any business. The CEO is responsible for all key business decisions and ultimately the company's success. The CEO gives employees throughout their organisation someone to look up to. Employees can follow the examples of customer service and professionalism set by their CEO.

The CEO also acts as a figurehead for the company. While customers interact with lower-ranked employees, the general public sees the CEO as the public face of the business. Their impressions of the CEO typically influence how they feel about the organisation.

What are the responsibilities of a CEO in their role?

While a CEO's duties vary depending on their business, they always have the following roles and responsibilities:

Developing and implementing the company's strategy, vision and mission
Making vital business decisions about business strategy, budgets, company culture and key personnel, including setting strategic goals
Assessing the work of other executive leaders within the business
Communicating with shareholders, government bodies, media and the public on the business's behalf
Staying aware of developments and expansion opportunities within the business's industry
Ensuring the business is a good corporate citizen that behaves in a way that's socially and environmentally responsible
Identifying, monitoring and reducing the impact of business risks
Reporting the business's financial status, risk ratings, growth potential and government compliance to the Board of Directors

What is the role of a CEO in a small business?

The CEO of a small business usually has a more hands-on role than the CEO of a large business. The CEO in a large business typically only interacts with executive leaders and shareholders. CEOs in small businesses are more likely to interact with people across the organisation and customers.

As small businesses have fewer employers, CEOs typically assume duties that CEOs in large organisations would delegate to department heads. For example, rather than getting department managers to hire their own employees, CEOs in small companies may hire staff across their organisation.

What does a good CEO do as part of their role?

A good CEO of a company acts as a role model for their employees. They lead by example, showing professionalism and being enthusiastic about the organisation. They are dependable and dedicated to their role, and expect the same of their employees.

A good CEO also does their research. They have a keen insight into their industry and they remain committed to staying up-to-date with new developments. Their research helps them identify new trends, cost-saving measures and ways to improve their business performance. Being informed helps them develop a company that succeeds. It also helps them adapt their approach and create new strategies for future success.

What tasks does the role of a CEO require on a daily basis?

CEOs perform different duties depending on their business, their industry and the business size. Some of the common tasks they may perform on a typical day include:

Reading newspapers and industry blogs to learn of developments in their sector
Meeting with the executive team to discuss business strategy and the latest financial results
Having phone interviews with journalists from key publications to discuss a new company development
Teleconferencing with teams in international offices to stay up to date with their progress
Attending a networking event with other industry leaders

The average salary for CEOs

According to Indeed Salaries, the average salary for a CEO is $129,829 per year. However, the salaries of CEOs can vary significantly depending on their experience, location and their company's success. Qualifications like degrees and certificates can also affect a CEO's salary.

How to take on the role of a CEO

Most CEOs progress up the corporate ladder from entry-level roles to high-ranking positions. These are the typical steps CEOs take to secure their positions:

1. Get a relevant bachelor's degree

Most CEOs attend university for at least four years to secure a bachelor's degree. This bachelor's degree may be in the industry they work in, such as tourism or finance, or a business topic such as business, business administration or economics.

2. Obtain a relevant master's degree

Although it is optional, many CEOs get a master's degree for a competitive advantage over other job applicants. A master's degree can be a prerequisite for CEOs in some large and prestigious companies. Many CEOs choose a Master of Business Administration or an industry-specific postgraduate degree.

3. Gain industry experience

Aspiring CEOs typically secure entry-level work in their chosen industry after graduating from university. This experience helps them understand their industry. Once they become familiar with their role, they may show their initiative by volunteering for additional training courses or leading projects.

4. Enrol in training courses

Many aspiring CEOs enrol in training courses that teach essential management skills such as project management, leadership and public speaking. These courses may be available through their place of work or external training providers. Completing these courses helps aspiring CEOs improve their knowledge and show their initiative.

5. Get promoted

After showing initiative and talent, aspiring CEOs get promoted to higher-level jobs with more responsibility. It usually takes several promotions before securing the CEO role. They may work for different companies or advance within the business that promotes them to the CEO role. The CEOs of small companies usually have between 10 and 15 years of industry experience, with several years in leadership roles. Larger companies usually appoint CEOs with between 20 and 25 years of experience in their industry.

Skills successful CEOs use in their role

CEOs need a variety of skills to manage companies, their budgets and their employees successfully. Businesses look for CEOs with the following important skills:

Leadership and management

CEOs should feel confident in a leadership role. The most successful CEOs lead by example, showing commitment to the company and motivation to help it succeed. They also feel comfortable managing all parts of a business's operations, including its finances and employees.

Communication

CEOs need strong written and verbal communication skills to share with relevant parties their plans for the company. They use verbal communication skills during meetings and interviews. As CEOs regularly give presentations and lead meetings and press conferences, they should feel confident speaking in public. Their written communication skills help them understand reports from other departments and write plans and policies. CEOs also need good listening skills to help them collaborate with other executives and stakeholders.

Decision-making

CEOs are ultimately responsible for all key decisions in their organisation, so they need sound judgement. They should know who to consult and how to conduct research to give them the information they need to make the best business decisions. They know how to balance the information they receive and their own intuition. Once they make decisions, CEOs should feel confident they've made the best choice for their organisation and its employees.

Problem-solving

CEOs regularly solve problems in their organisation, such as how to boost cash flow and how to recruit and retain top employees. Their analytical skills help them assess each situation and efficiently find solutions. Some of the best CEOs are also creative thinkers who can find new and innovative solutions. Efficient problem-solving helps them minimise the impact of any challenges their organisation faces.

Time management

CEOs must stay across all facets of their business, so good time management skills are essential. These skills help them stay organised and make sure they attend to all necessary tasks on time. They also help CEOs prioritise their tasks so they complete the most urgent duties first.

The career outlook for CEOs

The number of chief executives and managing directors, including CEOs, should increase slightly by 2024. In 2019, there were 30,800 people with these positions. By 2024, experts expect that number to grow to 31,000.

New CEOs manage new businesses in all industries and take the place of retiring CEOs. However, competition for their positions is strong due to the high salaries and key CEO roles and responsibilities. People with a lot of management and industry experience and postgraduate degrees are more likely to secure open CEO jobs.

CEO work environment

CEOs work for a wide range of businesses with various sizes operating in many different industries. They usually work in offices, which are often private and separate from other employees. They often work long days, especially during periods of peak business activity. They may be the first person in the office and the last person to leave. They may also work on weekends, either in the office or at home, to meet deadlines.

While CEOs regularly teleconference with people in other locations, many CEOs spend a lot of their time travelling. They may travel interstate or overseas to visit company branches, meet business contacts and attend conferences and networking events.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate’s experience, academic background and location.