What is the CEO of a public company?
It’s a much-coveted title, and a CEO (or Managing Director, or President) is far more than a name-plate role. He or she typically has responsibility for decision making, strategic direction, financial performance, as well as reporting to the Board.
What does the CEO actually do?
This is as varied as public companies themselves. You’re still at the initial stage of the role, so the answer for you at the moment is, you’re probably responsible for pretty much everything.
Your main duty is to set the strategy and direction of the company. You create the culture, and build the team to help you grow the business. You always have one eye on the shareholders. As things develop, you can delegate more – and your duties become those tasks that you can’t hand over, and this includes ultimate responsibility.
What does it take to become a great CEO?
There’s a lot written about this; however the number one quality seldom differs. A good CEO has to have leadership skills. Your colleagues want to follow you – you’re more than simply a manager. You know when to collaborate and how to inspire. You also have to be able to manage the Board and the expectations of the shareholders. As a good leader, you also know when and what to delegate.
Clarity is also essential. A CEO needs a clear strategy and goals, and knows how to communicate this. It also helps if the CEO has a sound knowledge of the business at all levels, and will still happily roll his or her sleeves up when required. This is where founding CEOs like yourself can be a real asset, and you have that in-built credibility from knowing the business from the ground up.
But don’t feel intimidated. We don’t all have to suddenly develop the charisma of Sir Richard. Good CEOs grow with their company. And yes, the learning curve may be steep at some points, but it will rarely be insurmountable. You’ve already built up a business and successfully floated it.
Of course, as well as demonstrating these skills, your performance has to be measured. It’s all too easy for CEOs’ egos to take control – don’t let this happen to you. Make sure you (or the Board) set clear targets for you, aside from simply looking at the bottom line.
What if this role doesn’t suit me?
It’s not uncommon for the startup CEO to hand over to a professional CEO. However, it’s noticeable that some of the most famous CEOs of recent times (Messrs Zuckerberg, Gates, and Jobs) are “founding CEOs”. In their industries, innovation is all, so it makes sense that those with that initial creativity keep driving progress. However you may decide that the heart of the business does not depend upon the founder remaining in control.
The Board has the responsibility of replacing the CEO should you wish to step aside. And it’s always worth remembering, that the Board also has the power to replace the CEO if the business is not performing. This is a rather sobering prospect that you never had to encounter as a pre-public company owner.
Still want to be a CEO?
In some ways, things won’t change. If you’ve been managing a successful business and running a team, you’ll understand about leadership, keeping financial performance tight, and sheer hard work. The main difference aside from the CEO title is the responsibility you now have to the Board and shareholders, as well as the regulations your public company has to adhere to.
It’s not an easy role – however as a business owner, you’ve never really gone for the easy route, have you?
To find out more about how your role will change post-flotation, please get in touch with us at Panmure. We’ve helped many entrepreneurs like you make the transition from business owner to CEO. Please contact Patric Johnson for the full picture.