What Is a CEO Accountable For?
The chief executive officer of a company holds the responsibility of running that company from the ground floor. CEOs commonly designate tasks to subordinate employees. However, as author John Carver points on his book "Boards that Make the Difference," the CEO generally constitutes the only company employee in direct contact with a company's governing board of directors, and thus commonly finds himself held accountable for everything regarding a corporation.
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Company Failure
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The chief executive officer is accountable for the success or failure of a company. The CEO job description emphasizes successfully overseeing all facets of a company's operations. Though failure in any branch of operations, at any level, is not necessarily the result of direct action or inaction on the part of the chief executive officer, it represents a failure on the part of the CEO to enact the proper provisions to prevent such failure or hiring the employees necessary to ensure success. A company's board of directors holds a CEO accountable for such failure, though also for the successes of a corporation.
Management Performance
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One of the most important aspects of a CEO's job entails assembling a management team. This team directly or indirectly oversees all operations of a company not overseen by the CEO. Assembling a management team constitutes delegation of tasks, for which the CEO holds direct accountability. This management team hires lower management personnel for the various branches of a company, enacts corporate ethics codes and policy, oversees operations and monitors performance at varying levels of a company. A failure at any link in this chain ultimately reflects a poor decision during the assembling of the management team by the CEO and constitutes an action for which the chief executive officer is accountable.
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Company Culture
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The CEO of a company is accountable for the nature of that company's culture. The actions, attitude and business philosophy of the chief executive officer lead to the creation of a company culture that affects the daily lives of all of a company's employees. If a company culture negates the ultimate goals or ethics code of a corporation by failing to encourage or tolerate diversity, dedication, hard work, perseverance, equality, profitability and other sound business practices, the CEO is accountable for that failure.
Public Image
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Unlike every other employee on the corporate chain, the CEO is accountable for all of his actions and behavior. Most notably, if the chief executive officer creates a bad public image for himself through marital infidelities, financial discrepancies, personal scandal or intimations of illegal or unethical behavior, that image tars the public's perception of the company. Thus the CEO is accountable for the public image of the company. Inappropriate behavior on the part of the CEO may lead to insubordination in the workplace or a general cultural of malaise and malcontent, for which the CEO is directly accountable.
Legal Accountability
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The CEO of a company holds legal accountability for adhering to the terms of his contract and dutifully serving the company for which he works. Forfeiture laws maintained by states throughout the Union require that CEOs who do not serve the best interests of a company must forfeit their title and earnings, sometimes retroactively. For instance, authorities in Massachusetts found Lars Bildman, former chief executive officer of Astra USA Inc., guilty of fraud, conversion, waste of corporate assets, breach of fiduciary duty, and sexual harassment of Astra employees. As a result of this conviction, Bildman returned $5,599,097 in salary and $1,180,000 in bonuses to the company.
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References
- SteveRobbins.com; What do CEOs do? A CEO Job Description; Steve Robbins
- The B.E.S.T. CEO Group: The Accountable CEO
- "Boards that Make a Difference"; John Carver; 2006
- "Exposing the Elephants; Creating Exceptional Nonprofits"; Pamela J. Wilcox; 2006
- Massachusetts SJC and Appeals Court Cases: Astra USA, Inc vs. Lars Bildman
- Photo Credit Digital Vision./Digital Vision/Getty Images
