Chief Executive Officer

Governance Glossary

Published: February 23, 2024


Introduction to the CEO Role

The Chief Executive Officer (CEO), is the top executive position within an organisation, tasked with making major corporate decisions, managing the overall operations and resources of the company, and being the main point of communication between the board of directors and the corporate operations.

This role encompasses a wide range of responsibilities that can vary depending on the organisation’s size, culture, and industry, but fundamental aspects of the role are consistent across the board.

Strategic Leadership

The CEO’s primary responsibility is to provide strategic direction for the company, setting short-term goals and long-term vision in alignment with the stakeholders’ expectations. They are charged with making pivotal decisions that affect the company’s direction, performance, and overall success. This includes determining the company’s policy, operational strategy, and organisational culture.

Leadership Qualities

In executing their duties, CEOs must possess an array of skills and qualities. Leadership is paramount among these, as CEOs must inspire and guide the senior management team and the wider employee base. They should foster a positive and productive culture within the organisation and lead by example, embodying the company’s values in their everyday actions and decisions.

Strategic Planning

Strategic planning is another critical component of the CEO role. This involves not only working with the board to set the strategic vision for the company but also mapping out the pathway to achieve this.

It requires a deep understanding of the market in which the company operates, competitor analysis, and foresight into future trends and challenges. CEOs must balance innovation with practicality, ensuring the company’s growth while also maintaining fiscal responsibility.

Communication Skills

Communication skills are essential for a CEO, as they must effectively convey their vision and strategies to a wide range of stakeholders including employees, board members, investors, customers, and sometimes even the public. This requires clarity, persuasion, and the ability to listen and adjust strategies based on feedback and changing environments.

Financial Acumen

Financial acumen is another crucial aspect of the CEO role. Even though specific financial tasks are often handled by the CFO (Chief Financial Officer), the CEO must have a solid understanding of financial reports, budgeting, and financial forecasting to make informed decisions that will lead to the company’s financial stability and growth.

External Relationships

The CEO also plays a vital role in building and maintaining relationships with external parties such as investors, partners, and other stakeholders. They represent the company in negotiations, at public events, and during significant transactions, acting as the face of the company and working to advance its interests externally.

Operational Management

Operational management, although sometimes delegated to other executives, still falls under the umbrella of CEO responsibilities. This includes overseeing the implementation of the company’s strategies, ensuring operational efficiencies, and maintaining the quality of products or services. The CEO needs to have a broad understanding of the organisation’s operations to optimise performance and achieve strategic objectives.

Talent Management and Succession Planning

The CEO is pivotal in talent management and development within the organisation. This encompasses hiring, mentoring, and retaining senior management, ensuring that the right team is in place to execute the company’s vision. Part of this responsibility involves creating a succession plan, ensuring that the company can continue to thrive even in their absence.

Relationship with the Board

The CEO’s relationship with the board of directors is a critical aspect of their role, serving as a bridge between the company’s operational side and its governing body. This relationship is founded on mutual trust, communication, and a shared vision for the organisation’s future.

The CEO is responsible for implementing the board’s directives and providing them with accurate, timely information about the company’s performance and challenges. They must also solicit and incorporate feedback from the board on strategic decisions and company policies.

This collaborative dynamic ensures that the organisation adheres to its governance framework while pursuing its strategic objectives. The CEO must navigate this relationship with diplomacy and integrity, balancing the board’s oversight role with the executive team’s operational autonomy.


In summary, the CEO is the highest-ranking executive in an organisation, responsible for making major decisions, setting the strategic direction, and ensuring that this strategy is implemented effectively across all levels of the company. They must possess a blend of leadership, strategic thinking, financial acumen, and communication skills.

The role demands a visionary capable of steering the company through challenges and opportunities alike, ensuring its success and sustainability in the long term. CEOs are more than just decision-makers; they are leaders, motivators, and the driving force behind the company’s achievements.

What is the role of a CEO in a not-for-profit organisation?

In a not-for-profit (NFP) organisation in Australia, the CEO is the highest-ranking executive officer responsible for the day-to-day management decisions and for implementing the organisation's long and short-term plans. A CEO reports directly to the Board of Directors and is primarily tasked with driving the organisation's mission, strategy, and operational excellence.

Unlike in the for-profit sector, where a CEO's focus might lean more towards profitability and shareholder value, in an NFP, the emphasis is on achieving the organisation’s social, cultural, or environmental goals.

How is a CEO appointed in a not-for-profit organisation, and who does the CEO report to?

The appointment of a CEO in an NFP organisation is typically the responsibility of the Board of Directors. The process involves identifying the organisation's needs, conducting a thorough search (often with the help of recruitment agencies), and then evaluating candidates against the strategic needs and culture of the organisation.

Once appointed, the CEO reports directly to the Board of Directors. This accountability to the Board is fundamental because it ensures that the CEO’s actions and decisions are aligned with the strategic direction and governance framework established by the Board.

What are the differences between a CEO in a not-for-profit vs. a for-profit organisation?

While the roles of CEOs in both not-for-profit and for-profit organisations involve leadership, strategic direction, and operational management, the context and emphases differ. In a not-for-profit organisation, the CEO focuses on achieving the organisation's mission and making a positive impact on the community, culture, or environment the organisation serves. This might involve fund-raising, advocacy, and stewardship of public or donor funds.

Conversely, a CEO in a for-profit organisation is primarily focused on profitability, revenue growth, and shareholder value. The performance metrics, incentives, and sometimes even the skill sets required for these roles can vary accordingly, although there are many areas of overlap in terms of leadership, strategic thinking, and management capability.

It is worth noting that a not-for-profit CEO still needs to be focused on ensuring the future financial sustainability of their organisation.

Can a CEO of a not-for-profit be a member of the Board of Directors?

The governance structures of not-for-profit organisations in Australia vary widely, and it is possible, although not always common, for a CEO to also be a member of the Board of Directors. However, this arrangement can pose potential conflicts of interest and challenges in maintaining clear lines of accountability.

Best practice guidelines often suggest that maintaining separation between the Board (responsible for governance) and the CEO (responsible for management and operations) helps to ensure more effective governance and management. That said, every organisation is unique, and the decision should be made in the context of what best serves the organisation's purpose and governance model.


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Better Boards connects the leaders of Australasian non-profit organisations to the knowledge and networks necessary to grow and develop their leadership skills and build a strong governance framework for their organisation.

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