Executive leadership
CEO
CEO is the top executive of a company: owns strategy, capital and the leadership team, and answers to the board of directors and shareholders.
Also known as: Chief Executive Officer, Chief Executive, President & CEO, Group CEO.
What does a CEO do?
A CEO is the top executive of a company who decides where it is going, where its money and people go, and answers to the board and shareholders for the result. A hired CEO usually comes in at a turning point, when the founder or the shareholders need someone to take the company further:
- sets the strategy and turns it into annual goals for the whole team;
- builds and reshapes the leadership team: COO, CFO, CTO, CPO, CMO;
- raises capital and manages the relationship with the board and shareholders;
- personally leads the largest deals, partnerships and market entries;
- makes the decisions that cannot be delegated: what to shut down, where to invest, whom to let go.
When does a company need a CEO?
A company needs a hired CEO when it has a working business but its current leader can no longer, or no longer wants to, run it. Typical situations: the founder wants to go back to product or technology, an investor asks for an experienced leader after a round, the company is being prepared for an exit or an IPO, or a new business line or country becomes a separate business with its own P&L. A crisis is another trigger, when the company needs someone who has already led a restructuring. The role will not work if the founder is not really ready to hand over decisions: the hired CEO leaves within a year, and what the company actually needs is a strong COO to take over operations.
CEO vs COO: what's the difference?
A CEO decides what to build, while a COO is responsible for how it runs day to day. The CEO owns strategy, capital and the board relationship; the COO runs processes, teams and execution within that strategy. A managing director or country manager, in turn, runs a business within someone else's strategy and budget: close to a CEO in scale, but not deciding where the whole company goes.
CEO vs related roles: comparison
| CEO | COO | Managing Director | |
|---|---|---|---|
| Responsible for | Strategy, capital, leadership team | Operations and execution | A business in one country or line |
| Main result | Company value | Working processes and metrics | Revenue and profit of the unit |
| Works with | Board, investors, leadership team | CEO, function heads | Group CEO, local team |
Why is it hard to hire a CEO?
Hiring a CEO is hard because the number of suitable people is tiny and their CVs say almost nothing about how they will perform.
- CEO experience depends heavily on context: someone who grew a company from 50 to 500 people may fail in a turnaround, and the other way round.
- A CV does not show what the candidate did personally and what came from the team or a good market.
- The profile is often not aligned inside the company: founders, the board and investors expect different things from the CEO, and this surfaces only in the final meetings.
- The search is almost always confidential, so the role cannot be advertised, and strong candidates rarely consider offers.
What to decide before hiring a CEO?
- Why does the company need a new CEO right now? The answer defines the profile: a CEO for growth, for a turnaround and for an exit are different people.
- Which decisions stay with the founders and the board? If the boundaries are not set in advance, a strong candidate leaves after the first conflict over authority.
- What result in 18–24 months will the board judge the CEO by? Without a measurable goal you can neither choose a candidate nor tell whether they succeeded.
- Will the offer include equity? For a CEO it is often the main argument, and raising it at the end of the search is too late.
Where to find a CEO?
CEOs usually come from companies with a similar model, stage and market: sitting CEOs and heads of business units, COOs and commercial leaders ready for their first top job, and founders who have sold their company. A strong signal is a track record of owning a full P&L, with clear numbers for what the company looked like when they joined and when they left. NEWHR searches for these candidates by the results of their work, not by applications to a job post.
How to assess a CEO in an interview?
A CEO is assessed through a walkthrough of the businesses they ran and a strategy session on your company. The walkthrough covers the numbers on entry and exit, the hardest decisions and the ones the candidate would now reverse. The founders and board members take part on the company side, and the final stage is references from investors and people who reported to the candidate.
Strong signals:
- names their own mistakes and explains what they learned;
- asks about money, shareholders and authority before asking about the team;
- talks about results in business numbers, not in the size of their remit.
Red flags:
- every success is "we", every failure is the market or the shareholders;
- ready to accept the role without finding out which decisions stay with the founder;
- describes strategy in general terms, without choosing what the company will stop doing.
How long does it take to hire a CEO?
We present the first candidates for the CEO role within 5–7 days of the brief. The whole search usually takes one to six months: founders and the board need to agree on the profile, candidates take longer to decide, and the offer often includes equity.
Related roles
- COO — owns execution of the strategy and operations, not the strategy and capital themselves.
- CFO — the CEO's partner on money, reporting and investors.
- CBDO — drives business development and partnerships, but within the CEO's strategy.
- CTPO — the top person for product and technology; often the CEO's right hand in a tech company.