Free Micro-eMBA Module #3

Role of Chief Executive Officer

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Adapted from the Field Guide to Leadership and Supervision.

This learning module is in the organization development program. However, this module can also be used by anyone as a self-study exercise to learn more about the role of the chief executive officer.

Sections of This Module Include the Following

Introduction
Outcomes
Materials for Review
Suggested Topics for Reflection and Discussion
Activities to Build Systems and Practices
Assessments
Tracking Open Action Items



INTRODUCTION

In an incorporated organization (including in a nonprofit), the chief executive officer (CEO) is the singular organizational position that is primarily responsible to carry out the strategic plans and policies as established by the board of directors. The chief executive officer reports to the board of directors. In other types of organizations (other than corporations, eg, sole proprietorships), the top-level officer is often called the chief executive officer, as well.

The goal of this module is to provide sufficient overview to gain strong, initial perspective on the role of chief executive officer, particularly when helping to establish the board of directors. The chief executive officer should have at least basic understanding of all of the systems and practices conveyed across the various learning modules in this program. Therefore, this learning module does not go into great depth about each of the particular systems and practices managed by the chief executive officer -- rather, this module relies on the rest of this program to provide that depth of information.

NOTE ABOUT THE ORDER OF MODULES (AND SOME DUPLICATION WITH UPCOMING MODULE ON BUILDING BOARDS): The board of directors in a corporation is legally charged to govern a corporation. Therefore, it is often common to start training programs with an overview of the board of directors. However, in this program, this learning module about the role of the chief executive is presented before the learning module about boards of directors. The reason for this order of modules is as follows. Frequently corporations are started by someone with a strong vision for a new product. That person often goes on to become the first chief executive officer of the new organization. Typically, that person also takes a very strong role (often the leading role) in the initial organization and development of the board of directors. Therefore, modules in this program are organized to help the founder (and often the first chief executive officer) maintain clear perspective about the roles of chief executive officer and board of directors before going on to focus attention on building the board of directors.

NOTE ABOUT BOARD COMMITTEES: If you are starting a corporation and using this program to do so, then you will soon be building your board. When you do, consider establishing a Board Personnel Committee to review and help guide implementation of the information in this learning module -- that Committee could be very useful to help develop and support the CEO. Major activities and goals from this learning module could be incorporated in that Committee's Committee Work Plan.

Also see
Related Library Topics



OUTCOMES

Learners who complete this module will achieve the following outcomes:

  1. Learn What a Chief Executive Officer Is
  2. Understand Major Functions of CEO
  3. Understand Core Knowledge and Skills for CEO Role
  4. Be Prepared for Building Your Board
  5. Set Basis for Strong Board-Staff Relationships
  6. Avoid "Founder's Syndrome"


MATERIALS FOR REVIEW

  • The following materials will help you address each of the topics and learning activities in this module.

Orientation to Chief Executive Role

Chief Executive Role -- particularly the sections:
- - - What is the "Chief Executive Officer"? (review all)
- - - What Do Chief Executive Officers Do? (review all)
- - - - - - General Responsibilities (review all)
- - - - - - Typical Functions/Responsibilities (review all)
- - - - - - Sample Job Description (study)
- - - Core Areas of Knowledge and Skills (click on each area and scan contents)

Basic Preparation for Building a Board

Overview of Board Roles and Responsibilities -- particularly the sections:
- - - Board Roles and Responsibilities
- - - Sample Job Descriptions
- - - Guidelines for Recruiting New Board Members
- - - Sample Board Application Form
- - - Ideas to Generate Participation of Board Members

Basic Preparation for Working With Board

Board and Staff Responsibilities
Sustaining High-Quality Relationship Between Board Chair and Chief Executive
Should CEO Be On the Board? (scroll down, read several articles)
Guidelines for Evaluating the Chief Executive
Sample Form for Board's Evaluation of Chief Executive

Optional: "Founder's Syndrome"

This is a fairly long document. Still, it's worth a careful read because it fully describes this syndrome which occurs so often when starting an organization.

Founder's Syndrome -- How Organizations Suffer -- and Can Recover



SUGGESTED TOPICS FOR REFLECTION AND DISCUSSION

  • Learners are strongly encouraged to discuss the following questions with peers, board members, management and executives, as appropriate.

Orientation to Chief Executive Role

1. What is the "definition" of a chief executive officer? See What is the "Chief Executive Officer"?

2. In a corporation, to whom does the chief executive report? See What is the "Chief Executive Officer"?

3. What are the five major roles of a chief executive officer? See Major Roles of the Chief Executive.

4. What are the six major functions/responsibilities of a chief executive officer? See Major Functions/Responsibilities of Corporate Chief Executive Officer.

Basic Preparation for Building a Board

  • Note that the founder of a corporation often recruits the first board members, and supports members to grow into their roles as board members, as well. Therefore, the founder should initially have some very basic understanding of the roles of a board. This understanding will soon be enhanced later on during further development of the board and organization.

1. Name the five duties and ten responsibilities of boards (as listed on the materials included in your materials for review)? (Note that various experts might offer a different mix of duties and responsibilities. The important point here is to get a basic sense of the overall responsibilities of a board.) See Board Roles and Responsibilities.

2. To whom is the board of directors responsible? See Board Roles and Responsibilities.

3. What are the responsibilities of the board chair? Vice chair? Secretary? Treasurer? Board member? Be sure you understand the role of the board chair. The chief executive officer and the board chair work closely together to coordinate and support board activities. See Sample Job Descriptions.

4. Of the 10 guidelines for recruiting board members, how many can you remember? The chief executive officer often plays a key role in recruiting the first members of the board of a new organization. See Guidelines for Recruiting New Board Members.

5. What information is requested by the board application (as listed in your materials for review)? (You might customize your own application form, of course.) See Sample Board Application Form.

Basic Preparation for Working With Board

1. Test your initial knowledge of the roles of board and staff by completing the table at Board Roles and Responsibilities -- Test Your Knowledge. Next, compare your answers to the answers depicted in the table Board and Staff Roles.

2. Name at least five actions that chief executives and board chair can take to ensure an ongoing, strong working relationship. See Board and Staff Responsibilities and Sustaining High-Quality Relationship Between Board Chair and Chief Executive.

3. Name at least five actions the chief executive and board members can take to ensure ongoing, strong participation of board members. See Ideas to Generate Participation of Board Members.

4. Describe the general procedure for evaluating the chief executive. See Guidelines for Evaluating the Chief Executive and Sample Form to Use During Evaluation of Chief Executive.

Optional: "Founder's Syndrome"

  • "Founder's Syndrome" can easily occur, primarily in new organizations. Organizational leaders can avoid a great deal of pain and hardship by understanding the basics of this syndrome and how to avoid it. When addressing the following questions, refer to the document Founder's Syndrome.

1. What is "Founder's Syndrome"?

2. What causes it?

3. How can you recognize it?

4. Name at least three actions that boards can take to address it.

5. Name at least three actions that chief executives can take to address it.



ACTIVITIES TO BUILD SYSTEMS AND PRACTICES

  • Learners are strongly encouraged to complete the following activities, and share and discuss results with peers, board members, management and employees, as appropriate.
  • As you proceed through the following activities, be sure to note any incomplete actions in the Action Item Planning List.

Writing a CEO Job Description

1. Draft a job description for the position of chief executive officer of your organization. If applicable, present the draft to your board for review and authorization. See Sample Job Description. Note that this job description should not merely be adopted as is, rather it should be modified according to the nature of and needs of your organization. )

Getting Ready to Recruit Your First Board Members

Basic Materials to Prepare

1. Draft a list of guidelines you can follow to being recruiting members for your board. See Guidelines for Recruiting New Board Members.

2. Draft a board application form that you can use to begin recruiting members for your board. See Sample Board Application Form.

3. One of the biggest turn-offs to potential board members is the appearance of an organization that's out of control, or that's in crises. The planning and systems you'll glean from this online program will help your organization to be attractive to potential board members. For now, gather materials that will help potential board members understand your organization, for example, marketing brochures, your mission statement, etc. Give them job descriptions of board members. (You'll soon develop more useful board materials in an upcoming module in this program.) See Sample Contents of Board Member's Manual.

Identify Potential Board Members -- Focus on Skills Needed by the Board (Eg, finance, marketing, personnel, etc.)

4. Make a list of what skills are needed by your organization. Think about what skills -- not just what people -- are needed on your board. If you're just getting started with your new organization, then you can use almost any help you can get -- but there are certain skills that are usually very useful early on, for example, financial help, help designing organizational structures, etc. Your needs will become more clear to you when you start and finish strategic planning in an upcoming module in this program. (Reference the Sample Board Recruitment Grid.)

5. Write a list of at least five people whom you will approach to join your board. See Sample Job Descriptions and Sample Board Application Form.

Managing Your Board and Employee Relations

1. What problems might you foresee in working with a board? It can be a major challenge for strong, visionary founders to help organize and develop a group of people to whom he or she reports. Write a list of the advantages and disadvantages to you. How can you overcome the problems that you might foresee? Present your concerns in an upcoming board meetings and ask for open discussion around your concerns. Or, approach another appropriate source of help -- but do address your concerns. They're likely to only get worse if left unaddressed. See Board and Staff Responsibilities and Sustaining High-Quality Relationship Between Board Chair and Chief Executive.

Building the Foundation for Board Evaluation of Chief Executive

1. Draft a set of preliminary performance goals for the role of chief executive officer for your organization (this list of goals will be refined in a later module about strategic planning). The board of directors should evaluate the performance of the chief executive officer on a regular basis. This evaluation should be done on a regular basis and should include reference to the responsibilities listed in the job description and performance goals for the year. The performance goals should be closely aligned with goals established during strategic planning. Performance goals defined during this module should be updated as a result of the strategic planning conducted in the upcoming learning module about strategic planning. See Guidelines for Evaluating the Chief Executive, Sample Form to Use During Evaluation of Chief Executive and Performance Management (basics concepts).

2. Write a set of guidelines that will be followed by your organization to evaluate the chief executive officer. Have the board members review the guidelines. (Later on in the learning module about boards, we will formally adopt a set of guidelines for evaluating the chief executive officer.) See Guidelines for Evaluating the Chief Executive and Sample Form to Use During Evaluation of Chief Executive.

Optional: Does Your Organization Have "Founder's Syndrome"?

1. Share copies of the Founder's Syndrome document with board members, if you already have them. Set aside 15 minutes in an upcoming board or staff meeting to share reactions and ideas about what you might do in the coming months in order to avoid the syndrome. Write down an action plan of what you will do, who will do it and by when. In the action plan, include actions the chief executive officer and the board can take.



ASSESSMENTS

The next learning module will provide an overview of basic management and leadership skills needed to start and manage an organization. However, you might find it useful to begin thinking about your own skills at this time. If so, consider the following assessment.
1. Needs Assessments for Management Training and Development



TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, people only see and react to the latest "fires" in their workplaces or their lives. Whether open action items are critical to address now or not, they should not entirely be forgotten. Therefore, update and regularly review a list of open action items (identified while proceeding through this program) that includes listing each open action item, who is responsible to complete it, when it should be completed and any associated comments. When updating the list, consider action items as identified during discussions, learning activities and assessments in this module. Share and regularly review this action item list with the appropriate peers, board, management and employees in your organization. You can use the following Action Item Planning List. (At that Web address, a box might open, asking you which software application to open the document.)

2. If you have questions, consider posing them in the national, free, online discussion group HRNET, which is attended by many human resource and organization development experts.



(Learners in the organization development program can return to the home page of the organization development program.)


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For the Category of Leadership:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

There is an explosion of books about leadership. Some are about broad and general philosophies, paradigms, visions and values. Others are about more specific models and theories. Still, others are about even more specific tips and tools. Bibliographies of books on leadership span numerous pages. The books mentioned on these pages are a reasonable beginning. They are focused on books with both foundational principles and practical tips and tools.

Note that, although many perspectives on leadership are about leading other individuals and groups, there are other domains of leadership, including leading oneself and organizations. The books referenced from this page are in regard to all domains of leadership.



Leading For-Profits and Nonprofits

There is much more in common between leading a for-profit and nonprofit than many people might realize. Small nonprofits are a lot more like small for-profits, than large nonprofits. Similarly, large nonprofits are a lot more like large for-profits, than small nonprofits. Nonprofits often include leading volunteers. A section, later on below, provides more books about leading specifically in nonprofits.

Leadership and Supervision in Business - Book Cover Field Guide to Leadership and Supervision in Business
by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools to effectively lead:
1. Yourself
2. Other individuals in the business
3. Groups and teams in the business
4. Business organizations
5. As well as all functions within the business organization.

Many of the Library's materials about business, leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.

Leading Nonprofits

The following books are recommended because of their highly practical nature and often because they include a wide range of information about this Library topic. To get more information about each book, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

Leadership and Supervision With Nonprofit Staff - Book Cover Field Guide to Leadership and Supervision With Nonprofit Staff
by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools customized for personnel in nonprofits to effectively lead:
1. Yourself
2. Other individuals in the nonprofit
3. Groups and teams in the nonprofit
4. Nonprofit organizations
5. As well as all functions within the nonprofit organization.

Many of the Library's materials about nonprofit leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.

Also see

For Leading Yourself
Personal Development -- Related Books

For Leading Other Individuals
Supervision -- Related Books

For Leading Teams
Facilitation and Teams -- Related Books

For Leading Organizations
Organizational Development -- Recommended Books

For Management
Management -- Recommended Books




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