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CEO Definition
By Kimberly Lekman, Esq. | Legally reviewed by J.P. Finet, J.D. | Last reviewed September 26, 2022
This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.
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What Is a CEO?
A CEO (an abbreviation for Chief Executive Officer) is the top corporate executive in a company. The CEO is one of the C-level executives, sometimes called the C-suite. The C-suite also includes the chief financial officer (CFO) and chief operating officer (COO). The CEO makes the major decisions for the company, which can affect all areas of the business.
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Key Takeaways
- The CEO is a company's top decision maker. They have the power to make important calls about how the company should run.
- The CEO is the main contact person between the board of directors and the company.
- The CEO is responsible to the stakeholders for the company's success or failure.
Understanding What a CEO Is
As the top executive, the CEO has the power to make final decisions on important financial and operational issues. When lower-level managers cannot solve problems, the CEO may need to take over or assist.
The CEO strategizes on many things that will affect the company, including operational and financial issues. The CEO also works to find new opportunities for the business to grow, change, and even buy other businesses.
Another important job for a CEO is to predict changes that could affect the business. In response to these possible changes, the CEO will make long-term plans for the company's future. This might mean creating new products or services or changing certain policies.
Common CEO Responsibilities:
- Make plans to grow the company and its profits.
- Find ways to work toward the company's vision.
- Act as the contact person between the company and the board of directors.
- Act on advice from the board of directors when needed.
- Manage other executives.
- Work with human resources to solve any issues with employees.
- Solve current or future company problems.
- Speak to the public or the news media about the company if needed.
- Work with other C-suite executives in the company like the CFO and COO.
CEOs in Larger and Smaller Companies
Depending on the size of the company, the CEO's duties can vary. In a large company, the board of directors usually elects the CEO. Sometimes the CEO is the chairman of the board. The CEO is the main contact person between the board of directors and the company and may sometimes need to act on the board's advice.
The CEO may be more of a motivator and a leader in a large company. They may only work on the big problems and plans. Lower-level executives and managers will then handle smaller issues.
In smaller companies, the CEO might sometimes be the person who started the company. They might make many of the minor decisions and manage day-to-day operations in addition to handling the larger problems.
In all companies, the CEO is the top decision maker. They lead the entire company, create business plans, and guide the company toward success.
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