CEO Full Form, Origin, Responsibilities, Salary

CEO Full Form: The top corporate officer in charge of managing an organization, typically a business or nonprofit, is called the chief executive officer (CEO), also referred to as the managing director or chief executive. CEOs work for a variety of companies, including nonprofits, public and private corporations, and even some government agencies (most notably state-owned businesses).

Also Check: APK Full Form

What is a CEO?

The CEO (Chief Executive Officer) is the highest-ranking person in a company or organization. This person is in charge of managing the entire organization and reports to the board of directors. The CEO sets goals, creates strategies, motivates employees, and ensures that the company is moving in the right direction.

CEO Term Origins

In an ordinance of the Congress of the Confederation of the USA, the term “chief executive officer” was first used in 1782 to refer to governors and other executives of the executive branches of each of the 13 Colonies. According to draft additions to the Oxford English Dictionary that were made available online in 2011, the term “CEO” was first used as an acronym for a chief executive officer in Australia in 1914. It was first used in America in 1972.

Also Check: AML Full Form

CEO Responsibilities

The CEO’s Responsibilities depend on the organization’s structure, and the board of directors or another authority determines them. They are usually codified in a formal delegation of authority concerning business administration and can be very broad or very narrow.

Typical duties include manager, executor, and leader roles, as well as active decision-making on business strategy and other important policy matters. Speaking to the public and media, as well as the management and staff of the company, can all be part of the communicator’s job description. Making high-level choices about strategy and policy is part of the decision-making role. The CEO is in charge of carrying out the board of directors’ established goals, targets, and strategic objectives.

As the company’s executive officer, the CEO inspires staff, promotes change within the company, and updates the board of directors on the state of the enterprise. The CEO oversees the day-to-day operations of the company in their capacity as a manager.

The CEO bears ultimate responsibility for all business decisions made by the organization, including those pertaining to operations, marketing, business development, finance, human resources, and so forth. Especially during election campaigns, the CEO of a political party is frequently tasked with raising money.

Also Check: ANM Full Form

CEO Related Positions

To assist in managing the day-to-day operations of the business, a CEO may have a number of subordinate executives, known as senior executives, executive officers, or corporate officers, depending on the organization.

Each of these executives has distinct functional responsibilities. Although different organizations have different titles for their subordinate executives, vice presidents (VPs) are a common subordinate executive category when the CEO doubles as president. A company may have multiple vice presidents, each with a distinct area of responsibility (e.g., VP of finance, VP of human resources).

The chief financial officer (CFO), chief operating officer (COO), chief marketing officer (CMO), chief strategy officer (CSO), and chief business officer (CBO) are a few instances of subordinate executive officers who usually answer to the CEO. According to Anthony Johndrow, CEO of Reputation Economy Advisors, the public relations-focused role of chief reputation officer is sometimes listed as one of these subordinate executive officers.

However, it can also be viewed as “just another way to add emphasis to the role of a modern-day CEO, where they are both the external face of, and the driving force behind, an organization culture.”

In the United States, businesses are the main users of the term “chief executive officer,” while non-profit organizations are the main users of the term “executive director.” These terms refer to different legal obligations and responsibilities and are typically mutually exclusive. As the top executive in a company, the CEO is accountable for managing operations, making corporate decisions, assigning resources, and acting as the primary liaison between the company and the board of directors.

Also Check: BMW Full Form

CEO Salary

The industry, size of the company, experience, and performance all have a big impact on CEO pay in India. Although they typically fall between ₹12 lakhs and ₹1 crore annually, top companies and specialized roles can command much higher compensation, possibly surpassing ₹5 crore or even ₹10 crore.

“Celebrity CEO” Culture

The idea of the “celebrity CEO” has been promoted by business publicists since the time of Edward Bernays (1891–1995), his client John D. Rockefeller (1839–1937), and, more successfully, Henry Ford’s corporate publicists. This method, which is frequently used by business journalists, makes the assumption that exceptionally gifted people, particularly the “heroic CEO,” are responsible for the company’s accomplishments, particularly in the manufacturing sector. Journalists essentially applaud a CEO who engages in unique strategic behavior.

The “great man theory” compares the model to the celebrity in politics, entertainment, and sports. According to Guthey ., “…these individuals are not self-made, but rather are created by a process of extensive media exposure to the point that their personalities, actions, and even private lives function symbolically to represent significant dynamics and tensions prevalent in the contemporary business atmosphere.”

Thus, journalism tends to overlook more difficult-to-describe broader corporate factors and exaggerate the CEO’s significance. The highly structured technical bureaucracy that performs the work is not given much thought. When the CEO absorbs the celebrity and becomes overconfident when making difficult choices, hubris sets in. The kinds of choices that draw in celebrity journalists might be highlighted.

According to a 2009 study by Ulrike Malmendier and Geoffrey Tate, “companies with award-winning CEOs subsequently underperform, in terms of both stock and of operating performance.”

Also Check: API full Form

How to Become a Successful CEO?

There is no one-size-fits-all formula, as with everything. However, many of the following traits are typically present in or displayed by successful CEOs:

• Extraordinary Zeal: The pressure and scrutiny that come with such a prominent position require a unique type of leader.
• Clear Vision: A CEO must be far ahead of the public in recognizing and comprehending potential trends in order to develop a business strategy.
• Excellent Leadership: Without the right people in place to make things happen, the business cannot succeed, even with unparalleled passion and foresight. In order to support the company’s mission and vision, CEOs need to be able to draw in talented human capital.
• Good Communication abilities: A CEO must convey and reaffirm the organization’s message while under constant scrutiny.

Although the CEO reports to the Board of Directors (BOD), they are the organization’s top operational decision-maker. Shareholders of the business vote on all appointments to (or removals from) the BOD. Theoretically, this is what gives an organization its Corporate Governance function.

As a safeguard, the BOD protects (and generally looks out for) the interests and rights of stakeholders. This makes sure that, despite having a very desirable title, the CEO does not have total control over the entire company.

The emergence of ESG (Environmental, Social, and Governance) has significantly altered the nature of board oversight. In contrast to their traditional sole responsibility of looking out for shareholders, sometimes known as shareholder primacy, boards are increasingly expected to look out for all stakeholders, including customers, employees, suppliers, and the general public.

CEO vs. Chair of the Board

The CEO is the organization’s top operator, meaning they are in charge of running the business. In contrast, the Board is run by the Chair of the Board. Technically speaking, the CEO reports to the board chair.

The CEO may also act as the Chair in certain situations. However, many businesses are abandoning that model as the scrutiny surrounding corporate governance practices increases. It is clear that there may be a conflict of interest when the CEO serves as the Chair of the Board, which is in charge of assessing the CEO’s performance and voting on his or her pay (and, if necessary, dismissal).

FAQs on CEO Full Form