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What is a CEO?

Tricia Christensen
By
Updated May 16, 2024
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CEO stands for Chief Executive Officer, and it is often the title of a person who holds the highest position in a company or on a board. A related title is president, which may be used instead, but it often suggests a level of democracy that's not common in most businesses. In the sense of a company, the workers in most cases do not choose a president, so using the title of CEO makes more sense.

Some large companies may actually have several CEOs, or at least one for each department. Small companies and small non-profit agencies usually have a single top executive and a vice-president who takes over when needed, or several vice presidents simply called "executive officers."

How a person gets to be a CEO is very individualized, depending upon the size of the company, the person in question’s background and education, and the type of company. Often, when a company first begins, the founder of the company acts as its leader. Later, if the company is profitable, the founder may recognize he or she is not the best person to be in charge, or would like to pursue other career goals, and may hire someone to run the company.

On boards, both profit and nonprofit, a CEO may be elected from a few worthy candidates. Again, the founder of a corporation may be the primary choice, but many times, especially when the company produces a product, the inventor who founds the company may really have no interest in running it. He or she may far prefer someone with greater business acumen to handle the day-to-day details of being "the boss."

In non-profit groups, limits may be set as to how many terms someone may serve as a CEO or president of a company. This is not always the case, and determination of who the leader is does not always occur by election. Sometimes when a nonprofit organization remains small, a small board consisting of a CEO, a secretary, treasurer or chief financial officer (CFO) and a few other board members will rotate the position.

Being a CEO may mean being responsible for overseeing many different branches of a company, or simply helping to run small board meetings and overseeing small organizations. This person may be present at meetings given for stockholders, may sign paychecks, and may take an active role in managing the company and setting goals.

The talented CEO knows that the greatest power he or she may possess is that of delegation, sharing the work and allowing other employees to have opportunities to make executive decisions, and grow with the company. The leader who never delegates is likely to be highly overworked, particularly in a large company. Those who are interested in heading companies are most likely to arrive at their goal by pursuing degrees in business management, particularly advanced degrees. Management skills are the hallmark of the talented chief executive, as he or she stewards the company into success.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Tricia Christensen
By Tricia Christensen , Writer
With a Literature degree from Sonoma State University and years of experience as a SmartCapitalMind contributor, Tricia Christensen is based in Northern California and brings a wealth of knowledge and passion to her writing. Her wide-ranging interests include reading, writing, medicine, art, film, history, politics, ethics, and religion, all of which she incorporates into her informative articles. Tricia is currently working on her first novel.

Discussion Comments

By anon309072 — On Dec 14, 2012

@anon166200: Yes, it is. My charter school I attended had a principal whose boss (or boss' boss) was the CEO, as there were multiple locations of the charter school.

By anon272544 — On Jun 01, 2012

It's not that hard to be a CEO. Lay off a bunch of people and collect millions in bonuses. Only the good CEOs think of other ways to save a company money.

By anon166200 — On Apr 07, 2011

Is there such a thing as a CEO in a school setting? Like say a principal, perhaps? is that possible?

By anon160644 — On Mar 16, 2011

Its harder to be a Ceo so they deserve the pay and hopefully give to charity while spending and helping the companies where they live.

By anon152616 — On Feb 14, 2011

@ Lemmings: I would dare say that if you were a CEO you may have a different stance, in regard to them being over paid.

If the head is not right, then the body will not survive. The fact that there is a shortage of individuals capable of successfully directing a large company, further increases the demand for successful CEOs. If you don't believe this, you should start a company (which is a brutal task in itself), then make it highly successful.

Should you complete this task, I believe you would have a new understanding of why they are so highly paid, their necks and reputations are on the line.

By anon104210 — On Aug 15, 2010

CEO's are the highest paid people in this world.

By anon79929 — On Apr 25, 2010

Perfect anon17934. We have a director where i work, the owners (father and sons) live abroad where the company was founded. I applaud my director for being really good at his job and making the uk stores grow at a healthy rate since arriving here in 2000.

I have been a manager myself and believe me, it took a lot of work to get there. Basically where I worked the manager left, then the assistant manager left, and so on until only sales assistants were left. I had cover managers coming in from other stores to help out and keep the day to day running.

After a few days i volunteered to take a more active role in the shop and did a few days using the limited knowledge of the end of day and shop floor running. Over time, i taught myself to do the wages and finances of the store, then the other paperwork followed.

I was sent to another nearby store for a day to learn the rest which turned out to be very little, and was appointed manager from succession. Believe me -- it was a hell of a lot of hard work to teach myself all that from just reading and comparing from old paperwork.

But I must disagree with you on some points. I wasn't the brightest at my school, didn't get the best grades, and the last two years before final exams i took off over 50 percent of my school time. i hated school, but enjoyed working. I had my first job at 13 in a salon, and at 14 i was a key holder and trainee stylist, and by 16 i was a stylist. Then i left to be a sales assistant where i moved up to manager by 18.

After the company closed, i went on to a supervisor's position as i can't live on a sales assistant's salary. I'm now 20 and am next in line for manager again if and when the current manager leaves.

Obviously i would like to move further up, but do it as i have so far and do it in increments. I'd like to go to manager again, then assistant manager, a assistant in a head office department, moving up to head of that department (preferably buying), then to the director's assistant and finally succeed the director when the leave.

And so on and so forth to CEO.

I don't know how much further within the company I'm in after the director other than what I have said above.

But good on every CEO and director for all their hard work. It's more than worth it to get where you want to be!

By anon17934 — On Sep 10, 2008

lemmings, That's why you should have stayed in school and become a CEO yourself instead of knocking someone who has worked hard to get that position. Don't hate; Congratulate!

By lemmings — On Apr 19, 2008

CEOs are so overpaid that it's not even funny. It makes me really sad that they get paid so much while the workers are being laid off to save money. It's really awful.

Tricia Christensen

Tricia Christensen

Writer

With a Literature degree from Sonoma State University and years of experience as a SmartCapitalMind contributor, Tricia...
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