The CEO role is one of the most difficult responsibilities to unpack. At the highest level, the CEO is accountable for everything—every function, goal, final decision, company performance, hiring, firing, financial results and reporting, product vision and roadmap, research & development, sales and marketing. For owners of stock in a company, the CEO’s responsibility is often viewed as steward of shareholder value—everything that contributes to increasing the value of the company, and therefore the shares of ownership that have been purchased and invested to help grow the business. This could be by founders who invested sweat equity, or friends & family or angel investors who put up financial see capital, or institutional venture investors, or private equity sponsors who invested across various growth stages of the business.
At the earliest stages of a company’s growth & evolution, the CEO may be the actual do-er, manager & leader, functioning in all levels of company development. However, as a company evolves, it can be helpful to parse the CEO’s role into for what they are accountable, versus for what they are responsible. Using these two terms, accountability is a skip-level, indirect ownership for making sure things get done and goals are achieved. The CEO as “manager” but not actual “do-er” of those functions and their related deliverables, so an indirect ownership of them, executed by others in their organization for which the CEO has ultimate accountability but those others have direct responsibility. If we define the term “responsible” for our purposes as direct versus indirect ownership of outcomes, it can help clarify the CEO direct responsibilities at a more granular level.
Let’s divide these CEO responsibilities by dividing them into what we can call “hard” and “soft” categories.
On the “soft” side, the CEO is responsible for the following company roles & goals:
One could think about the primary responsibility of the CEO being the leader who defines for the company the “Who,” the “What” and the “How”—
The CEO is very much the principal “compass setter,” evaluating and deciding which direction the company should take, why that direction, and what are the acceptable boundaries or ground rules for the mission.
What remains for the CEO as a direct report? It depends on the business sector. However, typically, the CEO retains direct functional reporting responsibility of
Depending upon the industry sector, human resources is considered a strategic vs. support function and also may report to the CEO, but again often with a solid line to the CEO, but heavy dotted line to the COO for the day-to-day, week-to-week blocking and tackling for which HR is responsible.