A chief executive officer (CEO) plays a pivotal role in the success and growth of a company.
The CEO controls all management and is the voice of management. The CEO represents management at the board. The CEO is the link between management and the board.
The CEO heads the executive arm of a company. Getting the right CEO is useful for two main reasons – the company will be able to perform better for shareholders interest and the board will be able to sleep better at night - knowing that all is well.
The responsibilities and challenges that come with the CEO position are vast, requiring a unique set of attributes to navigate the complexities of leadership in today's dynamic business environment.
Today, risk is ever pervasive. Even if you do not assume risk, risk is thrust upon you as with events beyond your control. A good CEO possesses a combination of strategic vision, effective communication skills, emotional intelligence, adaptability, and a commitment to ethical leadership.
Strategic Vision:
The board owns the strategy, but it is the CEO who executes it. A strong CEO is a visionary leader who can see the big picture and formulate a clear, long-term strategy for the company. They should be able to identify opportunities and potential challenges, anticipate industry trends, and position the organisation for future success.
A CEO with strategic vision can set a compelling direction that inspires the entire organisation. Though the board owns the strategy, the CEO should help formulate the strategy for the board's consideration, deliberation, acceptance, and ownership.
Effective Communication Skills:
Communication is a cornerstone of effective leadership. A good CEO should be able to articulate the company's vision, mission, and values in a way that resonates with employees, investors, customers, and other stakeholders. They must also be adept at listening to diverse perspectives and fostering open dialogue within the organisation.
The CEO must become the trusted face of the company. And one way to evaluate the CEO's communication skills is to attend general meetings. Better companies have a session during then AGM where the CEO presents the past performance and the future prospects along with the challenges.
Emotional Intelligence:
Emotional Intelligence (EI) is the ability to manage both your own emotions and understand the emotions of people around you. There are five key elements to EI: self-awareness, self-regulation, motivation, empathy, and social skills.
EI is crucial for building strong relationships and leading a diverse team. A CEO with high emotional intelligence can understand and manage their own emotions, as well as empathise with the feelings of others. This skill is vital for resolving conflicts, making informed decisions, and creating a positive corporate culture. Seek ye first to understand than to be understood.
Adaptability:
The business landscape is constantly evolving, and a good CEO must be adaptable to change. Whether facing technological advancements, economic shifts, cyber-attacks, or unforeseen challenges like global pandemics, the ability to pivot and adjust strategies is crucial.
An adaptable CEO can lead their company through transitions and disruptions while maintaining stability and growth.
Decisiveness:
CEOs are often required to make tough decisions, sometimes with limited information. A good CEO possesses the ability to make timely and informed decisions, taking calculated risks when necessary. Decisiveness instils confidence in the organisation and allows for agile responses to market dynamics.
Beware companies where boards micro-manage. They usurp much of the CEO's function. Boards provide oversight, management executes. As far as boards are concerned, it should be 'nose in, fingers out'.
Results-Oriented:
A successful CEO is focused on achieving results. This involves setting measurable goals, tracking key performance indicators, and ensuring that the organisation is moving toward its objectives. A results-oriented CEO holds themselves and their team accountable for delivering outcomes.
For students, the report card becomes the evaluator of performance. For CEOs, they may be called KPIs or the Balanced Scorecard. What gets measured, gets done. And if it can't be measured, then find a way to measure it.
Integrity and Ethical Leadership:
Ethical behaviour is essential for maintaining trust among employees, customers, and investors. A good CEO leads with integrity, making decisions based on ethical principles and fostering a culture of honesty and transparency within the organization. Ethical leadership builds a strong foundation for long-term success.
Some CEOs have left their positions when they were unable to do their job with ethics and with integrity. Some CEOs have been asked to leave their positions because they refused to operate unethically or without integrity. Like they say, it is better to lose your job for doing your job than for not doing your job.
Team Building and Talent Management:
Building a high-performing team is a critical aspect of a CEO's role. This involves recruiting and retaining top talent, fostering a collaborative work environment, and providing opportunities for professional growth. A CEO should be able to recognise and develop the potential of their team members.
The best CEO is one who has under him people who are more capable than him. The best CEOs nurture leadership and competence and not be threatened by it.
Financial Acumen:
Understanding the financial aspects of the business is fundamental for a CEO. This includes managing budgets, optimising resource allocation, and ensuring financial sustainability. A CEO with strong financial acumen can make informed decisions that contribute to the overall financial health of the organisation.
This does not mean that the CEO must be financially qualified, but the CEO must be financially literate just like all board members. What the CEO must have is the support of a competent finance function.
Customer Focus: A good CEO prioritises the needs and expectations of customers. Understanding the market, staying attuned to customer feedback, and consistently delivering value are crucial for maintaining a competitive edge. Customer-centric leadership fosters
brand loyalty and long-term success.
Companies that set up dedicated communication channels for their customers and communicate such dedicated channels to their customers are favoured. They become more customer centric.
The role of a CEO is multifaceted, requiring a diverse skill set and a holistic approach to leadership. A successful CEO combines strategic thinking, effective communication, emotional intelligence, adaptability, decisiveness, integrity, team-building skills, financial acumen, and a customer-focused mindset. By embodying these attributes, a CEO can guide their organisation through challenges, capitalise on opportunities, and drive sustainable growth in a rapidly changing business landscape.
*The writer is a former chief executive officer of Minority Shareholders Watch Group and has over two decades of experience in the Malaysian capital market