Role of the CEO

 

According to Crawford (2007), the two principle roles within the board are those of the Chief Executive Officer (CEO) and the Chair of the board. Despite the fact that these roles are different, they are often held by the same individual. The role of the CEO is to lead the management. The role of the chair of the board is to lead the board. A key role of the board is to monitor the actions of the CEO. Crawford suggested that in the presence of an efficient CEO, the CEO and chairman of the board should be a single entity.

According to Nevels (2010), the chair of the board, has to maintain the relations between the CEO and the board and additionally, direct the tasks allocated to board and those of each director in order to maintain efficiency-a role that requires great negotiating and diplomatic skills effectively acting as the interface between the CEO and the board. Additionally, it is within the remit of the chair of the board to address underperformance by an individual director

Pointer and Jennings (2002) discussed the significance on the CEO in the construction of an efficient board and outlined a multi-point strategy aimed at the CEO in order to accomplish this. They wrote about the need for self-evaluation by the board in order to assess both its performance and contributions to the running of the corporation. In their experience it was often observed that the CEO was under the misconception that because the CEO understood the items in question, that this would be mirrored by the board. As the board is constructed of various individuals, not necessarily filed experts in the Operations of the corporation, it was suggested that communication needs to be strategically assessed, focussing on the issue at hand, and that over-communication was a positive approach.

According to Conlon and Smith (2010), there are three tiers in management; the CEO, the senior management team and specific roles dependant on the structure of the company. A principle role of the CEO within this construct, is the plan of succession management in order to maintain business continuity. The CEO must have contingency plans should anything happen to the CEO, thus there is a viable continuity even in the absence of a handover in a worst-case scenario. Conlon and Smith additionally proposed a six-step system to identify suitable candidates for the role. This involved a clear definition of the requirements of the role, evaluation of potential contenders and appropriate feedback, evaluation of development of the potential contenders, developing a list of suitable external contenders, reassessment of contenders and subsequent appointment.

Tucci (2004) wrote that all CEOs need to build rewards into the staff remuneration packages for both entrepreneurship and acceptance for failure which at some point is an inevitable occurrence. Conversely, promoting innovations with terminal intensity in the absence of severe scrutinization would inevitably result in foreseeable failure. Corporation culture is influenced by the input of the CEO. Adopting standard modus operandi restricts outliers and unconventional practices however it is no match for thinking outside the box ahead of the market.

These sentiments were echoed by Newbold (2010) who discussed three key elements for the CEO to take into consideration when looking at innovative suggestions from the shop floor. Culture was a key element as the ambient culture within the corporation is ideally one that promotes innovation rather than stifles it with indifference. A culture resistant to change is harmful and creates the indoctrination that management is in itself resistant. Regardless of the viability of the innovation, it needs to be heard in order to promote this as organisational culture. Competency is a key issue as according to Newbold, innovation can be learned having similarities to quality improvement. Newbolds’ final element was courage that would be necessary for the CEO to promote the innovation-without the required support innovative ideas would fade into obscurity and would possibly need an iconic figurehead to champion them and gain acceptance.

Byrnes (2014), discussed the importance of quality and safety as being directly within the remit of the CEO as a focal point from which their importance and significance could be broadcast across the corporation. CEOs according to Byrnes, needed to be the figurehead in order to achieve significant buy-in from the workforce, suggesting that this was a role that delegation was inappropriate in that t=only the CEO had the pre-requisite authority to ensure these elements became endemic within the culture.

According to Rothfeder (2005), as a rule, CEOs perceive innovation as a concept that warrants encouragement and direction but can be adversely affected if managed to excess intimating that the role of the CEO needs to be perceived as a supporter from the perspective of the team as in the right culture, innovation was a natural by-product and would merely need support rather than being over-promoted, suggesting that a balanced approach was called for.

References:

Byrnes, J., (2014), The drive for value: key roles for the CEO. Healthcare Financial Management; Westchester68.6 (Jun 2014): 132, 134.

Conlon, R., Smith, R., (2010). The role of the board and the CEO in ensuring business continuity. Financial Executive; Morristown26.9 (Nov 2010): 52-55.

Crawford, C., (2007). CEO-chairman debate. Leadership Excellence; Aurora24.5 (May 2007): 17.

Nevels, J., (2010). The role of the board chair. Management Quarterly; Washington51.2 (Summer 2010): 13-15.

Newbold, P., (2010). Empowering innovation: The CEO’s Role. Healthcare Executive; Chicago25.6 (Nov/Dec 2010): 82,84.

Pointer, D., Jennings, J., (2002). Building really great boards: The CEO’s role

Healthcare Executive; Chicago17.3 (May/Jun 2002): 22-5.

Rothfeder, J., (2005). The CEO’s role in innovation. Chief Executive; New York 213 (Nov 2005): 50-55.

Tucci, J., (2004). The role of CEOs in innovation. Chief Executive; New York 202 (Oct 2004): 18.