What Is The Role Of A CEO In A Public Limited Company or Organization?
Question: I have always been curious to know this- What Is the Role of a CEO How much power does a CEO have over a public company? Do they control the entire operations, do they simply oversee the company growth or do they work hands on? Does the CEO have a say in the share price, even when the company is no making profits? When we say CEO, do they have as much power as the person who started the company? And if yes, then what about the CFO and CTO- shouldn’t they too possess as much power and control over the Company? Thank you
Role Of A CEO In A Company
Ans: The answer in simple words is that the Shareholders and the Board of directors have more control over the public limited company when compared to a CEO. This CEO does have the power and control to hire or fire people, but they are typically involved in hiring/.firing of high level executives/Vice presidents and so on. The other tasks are delegated to those below them in the ladder. The CEO can evaluate the performance of the company, do review with the operations head, and finance head, and steer the boat ahead. He is supposed to have the vision of the company in sight and work based on that. He does not have control over the share prices, it is completely in the hands of the business and how the company has been performing over the months.
The CEO’s power and extent of control is defined by the Board of directors only. Also, major decisions with regards to what other businesses to enter, or if ties with any existing client should be severed, etc are made by the Board of directors in consultation with the CEO. The CEO has the responsibility of making sure the business is done legally and within the framework provided, and ensuring that the processes are all in place. He will be held liable if any illegal activity or breach of security is discovered in the company, especially in a Public company