CEO Meaning: Here’s What It Means and How To Use It

Have you ever heard the term CEO and not known what it means? Don’t worry — here is everything you need to know about what a CEO is, what their roles are in the business world, and how to differentiate CEOs from other similar roles! 

What Is a CEO?

The acronym CEO stands for Chief Executive Officer. In almost every case, this is the highest position in the corporate hierarchy of an organization, business, or company. 

The CEO is typically tasked with making top-level managerial decisions, steering innovation in the company, and leading the senior management team. In a lot of cases, the CEO makes the final decisions in the company and has more influence than anyone else. 

Being the ultimate authority in an organization comes with a lot of responsibilities. The role of a CEO is very wide-ranging, which means the most successful CEOs need to have an accurate but innovative company vision, extensive management knowledge, and impeccable leadership skills. 

A lot of the time, CEOs come into their positions by climbing the corporate ladder thanks to the skills they have developed over the years. 

Since there is so much responsibility associated with this top position in an organization, the CEO’s salary is often the highest salary in the organization. They are also the most likely to receive recognition in the public eye instead of other company staff members. Whether this is a good thing or a bad thing typically depends on how good the CEO is at their job. 

What Do CEOs Do?

One of the main goals of a CEO is finding ways to guide the company and provide direction in accomplishing an organization’s long-term goals. No matter the size of the business, a CEO needs to lead in a way that uniquely suits the needs and abilities of the company at large. 

This requires a large amount of business knowledge, as well as the ability to work with people on an individual and personal basis. This often means making the most of exciting markets and customer bases while expanding the business into new markets. 

Another primary goal of many companies is answering to stakeholders. These are people who have invested money, time, and energy into the wellbeing of the company, and so they naturally want to see the company grow and improve over time. 

A CEO has to show these people that they are leading the company in a good direction that will lead to increased success. 

Another group of people that the CEO reports to is the board of directors, who are a group of business leaders that represent the shareholders. These are often other shareholders in the company that are vested in its success. This group of people does its best to ensure that the organization’s stock prices and business administration are doing well. If they aren’t, the CEO typically has to answer for it. 

How Is the CEO Different From Other Roles?

While the role of CEO is the most commonly recognized chief role in a company, there are many other top executives in various companies. Here are some of the most common roles, and how they differentiate from the CEO: 

• COO (Chief Operating Officer): This executive is tasked with overseeing a company’s day-to-day operations and administration. They ensure everything runs smoothly and efficiently on a smaller scale. They are typically the second in command of a company. 
• CFO (Chief Financial Officer): This executive helps the company maintain a healthy financial state. They oversee all financial activities and ensure the company makes smart financial moves. 
• CIO (Chief Information Officer): The CIO helps oversee the processes, technologies, and people within the internal IT structure of an organization. They make sure that internal information is communicated efficiently and effectively. 
• ​CTO (Chief Technology Officer): The CTO is very similar to the CIO, except their job is generally to use information technology to reach customers and other external parties. This helps the company grow and expand, as well as increase its efficiency and efficacy through updated technology. 
• CMO (Chief Marketing Officer): The CMO leads the marketing department of a company and helps spread the word about its products and services to the rest of the world. They create systems and communication that allow the company to grow and oversee all content that is sent from the organization to the world at large. 

What Do You Need to Do to Become a CEO?

There are typically two common paths to becoming a CEO. 

First, you can start a company. As the founder of the company, you will naturally become the CEO (or at least have the opportunity to take on the role, if you want it). 

Of course, it can take a long development period before the company will have more staff and the capability to expand. Still, there are many CEOs in the modern world that became CEO simply because they founded the company and maintained their position as the business grew. 

The next common way to become a CEO is by working hard and receiving the position after another CEO resigns or is let go. 

The process of climbing the corporate ladder typically starts with receiving an advanced degree in business like a Master of Business Administration, working in managerial roles, and slowly receiving promotions and climbing the structure of the company. After several years or even decades of hard work, people with enough skill and determination are often given roles among the top executives in companies, such as the CEO role. 

Sources: 

1. What Is a Chief Executive Officer (CEO)? Definition and Role | Indeed.com
2. Master of Business Administration (MBA) | Investopedia
3. Stakeholder definition | AccountingTools