What makes a person a ceo

Small businesses and big corporations alike have one thing in common: the person at the top is ultimately responsible for the organization’s success or failure. For larger businesses, particularly publicly traded companies, the chief executive officer, or CEO, is the highest-level person, while small businesses are typically founded and run by their owners.

When it comes to comparing a CEO vs. owner, there are many similarities and key differences between the two roles. For example, CEOs and owners often need similar traits to succeed, such as critical thinking and interpersonal communication skills. Their positions share certain crucial responsibilities, such as hiring employees for high-level roles in their organizations.

However, there is a big difference between the ways they each handle responsibilities. For example, owners often delegate financial management to others, though sometimes they maintain at least part of this responsibility themselves. This is not possible for corporate CEOs, who focus largely on market opportunities, competitors, and partnerships. As a result, CEOs are more likely to delegate tactical responsibilities to others in their organizations.

Both CEOs and owners can benefit from a Master of Business Administration (MBA) degree, which can prepare them with critical theoretical business and management knowledge to further their careers and professional profiles.

Comparing Owners and CEOs

According to the IRS, a business with assets of $10 million or less is considered a small business, while one with more is recognized as midsize to large. Whether the business is a brick-and-mortar organization or an internet company with a global reach, size matters because it determines the entity’s management structure.

For example, employees in large companies ultimately report to their CEOs. But CEOs also work for someone else — they are accountable to their company’s board of directors and, in publicly traded companies, to shareholders. On the other hand, owners are typically in complete control of their small businesses and accountable only to their customers.

The CEO is typically appointed by the board of directors and is the person in charge of the overall day-to-day management of a company. Owner, as a job title, is earned by sole proprietors and entrepreneurs who have total ownership of the business but do not have to be in charge of company management. The job titles CEO vs. owner, however, are not mutually exclusive — CEOs can be owners, and owners can be CEOs. And CEOs are not always accountable to a board of directors.

What Does a CEO Do?

CEOs often delegate the management of company finances, typically in the millions and hundreds of millions of dollars, to chief financial officers, or CFOs. This is especially true in publicly traded companies where CEOs are ultimately responsible for ensuring shareholders see returns on their investments. With this comes legal responsibilities to shareholders that include the duty of care loyalty. Such legal responsibilities are intended to promote transparency and trust and to protect key stakeholders of the business.

As the top executive at large companies, CEOs receive guidance from the board of directors as to the vision and goals of the organization. In the case of private companies, CEOs take direction from the owner(s) of the company. Either way, it is necessary for CEOs to delegate day-to-day management responsibilities to other top executives to be able to focus on strategies that will drive the success of the business.

CEO Salary

A variety of factors can affect a CEO’s salary. From the size of the business to the location or type of industry, salaries for CEOs can vary broadly. According to the U.S Bureau of Labor Statistics (BLS), the median annual salary for chief executives was $185,900 as of May 2020. With higher salaries come increased responsibility, and the majority of CEOs have a wealth of education and experience to draw from to be able to face business challenges and guide their companies.

What Does a Business Owner Do?

If a person owns 100% of a company, he or she is the owner of that company. If a person has a partner with equity in the company, then that person is a co-owner. In a nutshell, owners are in charge of everything in their business, from operations to sales to marketing.

To grow their business, owners must be willing to delegate responsibilities. Here is where hiring and developing people becomes an important skill. Like CEOs, owners want to ensure the financial health of their business, so they need to develop strategies to drive revenue growth. As the business expands, owners may need to hire other executives to run key operations, like accounting or marketing functions. Over time as their company grows, owners may take on the formal title of CEO. But unlike CEOs who report to boards of directors and shareholders, owners ultimately answer only to themselves.

Business Owner Salary

As the size and scope of businesses vary broadly, it is difficult to pinpoint an average business owner’s salary. Depending on the size of the business, percent of ownership or profit shares, and expenses, the salary from one business owner to the next can be vastly different. According to the compensation website PayScale, small business owners earned a median salary of about $64,800 per year as of October 2021, with the highest reported earning $156,000 per year, a figure that often increases with medium to large businesses.

The Value of an MBA for CEOs and Owners

Businesses find themselves in a world that is growing in complexity and scope. They need leaders who are skilled, knowledgeable, ethical, and creative, and who can adapt to global market changes and solve problems. The continuing digitization of information throughout the world is one example of this building complexity.

Additionally, a recent survey by Deloitte revealed that 77% of CEOs reported the COVID-19 crisis “accelerated their digital transformation plans,” making digital competency an essential skill for CEOs.

An MBA can provide relevant learning experiences for CEOs and business owners, helping them strengthen management and other key skills. While the duties and responsibilities between a CEO vs. owner vary, an MBA can prepare both for real-world challenges.

According to a 2018 survey report from the Graduate Management Admission Council, 81% of participating companies indicated they planned to hire MBA graduates. The rising popularity of the MBA is further evidenced by data from the Department of Education, which shows a steady rise in the number of master’s degrees conferred in business from 1980 to the present day.

An MBA can open opportunities to business leadership positions. In fact, among the 100 top-performing CEOs in the world, 32 hold MBA degrees, according to a 2018 report from Harvard Business Review — this is an increase from the previous year’s number, which was 29.

Become a Leader in Business

Working at the helm of a business is exciting and challenging. While there are advantages and disadvantages to being a CEO vs. owner, both can become market leaders, making a positive difference in the lives of employees, customers, and various stakeholders. With a well-rounded education, CEOs and owners can become innovators and guide their teams to success.

Recognized as one of the “Best Online MBA” programs nationally, the Online Master of Business Administration at Ohio University teaches valuable skills such as critical thinking, entrepreneurship, innovation, and leadership — all competencies that are crucial for leaders and holistic thinkers who want to make a difference in the world.

Learn more about how Ohio University can help prepare you for a potential career as a leader and secure your future in the business world.

What is a CEO?

A CEO, or chief executive officer, holds the highest position at an organization. They may or may not be the owner of the company, but either way they are responsible for making major decisions on behalf of the business, making sure the company is operating the way it should be and managing all leaders who report to them. They also must champion the company culture and build a business that makes employees feel like valued members of the organization.

CEOs may develop company goals, make strategic plans, implement programs and policies and work within a set budget. It's also common for CEOs to be the facilitator between the board of directors and other executives at the company.

Read more: How To Write a CEO Resume: Examples and Tips

12 traits of successful CEOs

If you want to be a successful CEO, here are some personality traits and qualities you may want to develop:

1. Optimism

It's important for leaders to be optimistic at work. Not only do CEOs act as a guide in the office to the other employees, but they are responsible for achieving certain goals and having a vision that can help the business succeed. There is a lot that comes with having an optimistic attitude, including the ability to motivate others, influence the workforce to think creatively and build strong relationships with all staff members. An optimistic leader is passionate about their work and the people who contribute to the organization.

2. Acceptance

Another trait of successful CEOs is acceptance. Not only do accepting CEOs make sure that a workforce is diverse, but they also realize that mistakes and shortcomings are natural. Employees should know that they don't have to fear making a mistake at work because that's frequently how they grow in their role, and a CEO should support that. If an employee makes a mistake, yet knows that the company accepts small failures, they'll be better able to acknowledge, publicly admit to and recover from the mistake.

Read more: Steps To Take After Making Mistakes at Work

3. Loyalty

Loyalty is important because with it, a CEO can inspire loyalty in their employees. Employees who are long term at an organization help reduce the employee turnover rate, which saves the company time and money in hiring someone new and conducting training. Even more important is what a loyal CEO and workforce brings to the business. Customers can pick up on an employee's loyalty to the organization through the words they say and how passionate they are about their job, which can help increase sales and customer satisfaction. Loyal employees may also refer high-quality candidates to open positions.

CEOs who are loyal to the company follow the company values and get others to do the same, build a strong workforce and want to train employees so they can become better at their jobs and realize their potential.

4. Understanding

When you're a CEO who's understanding, you show a certain level of care and compassion to your employees. You're more likely to consider their feelings about many things in the workplace, from widespread company changes to the organization's pay scale. An understanding CEO looks at a situation from different perspectives so they have more of a well-rounded view of how someone may interpret certain circumstances. With a good amount of understanding, a CEO can make business decisions that are both good for the company and with their employees' best interests in mind.

5. Trustworthy

When you've earned the trust of your employees, a lot of positivity can come to your workplace. Most importantly, earning the trust of your staff means that they are more connected to the organization and the work they do. This leads to a sense of fulfillment as employees are less stressed and happier with their jobs. Mutual trust also helps improve your relationship with others in the workplace. You probably already have a strong working relationship if you've earned your employees' trust, but as time goes on, that relationship should continue to grow.

Another benefit of being trustworthy is that you can properly communicate hard news to your staff and know that they trust you're making the best decisions for the organization. Your transparency, even in difficult situations, is held in high regard.

Read more: 14 Common Qualities Employers Are Looking For

6. Inspirational

When your staff feels inspired by you as their leader and the leader of the company, you may notice that they work harder to meet their goals, show more commitment to their job, have improved communication, increase productivity and think more creatively. They may also collaborate more. Inspiring leaders invest in their company's employees, acknowledge their strengths, help them work on any weaknesses and create a culture in the workplace where everyone feels like they belong and contributes something worthwhile.

7. Confidence

There are additional traits and abilities that come with confidence. When a CEO has confidence in themselves, they should also have confidence in the company they are in charge of, its employees and the work everyone completes to bring even more success to the organization. With confidence comes focus, strong leadership and vision.

Just like with employees, it's important to have confidence as a CEO because it increases your job performance, gives you a more positive mindset, helps you solve problems by looking at them from different angles and keeps you engaged at work. Employees notice these qualities in their leadership, and most will feel inspired to model the same in their work.

8. Critical thinking

Critical thinking means you're able to make decisions for the company based on clear thought and a lot of foresight. With the responsibility of managing the business and making sure it succeeds, CEOs have to look at data and factors like the economy and competing businesses to forecast what the company could have to handle in the future, then plan accordingly.

To start thinking more critically, examine all the possible outcomes of a situation and decide how you'd handle each one should it come to fruition. This will also help you think creatively and develop your problem-solving abilities. Another part of critical thinking is understanding the advantages and disadvantages of each decision when factoring in the success of the business in the long term.

9. Compassion

A compassionate CEO can inspire an entire workplace and really make a difference in the success of the organization they lead. With compassion, you may get to know all employees of the company, asking them questions and listening to their responses to learn more about them. You may come to understand them more, be able to relate to any successes or challenges they have and figure out how you can support them in their role and even beyond. Compassion means you empathize with your employees and genuinely care about them.

With a compassionate CEO leading a company, employees are generally happier, more productive, less stressed and better able to work together in teams and think creatively about ways to solve problems.

10. Reliable

One of the most important traits that a CEO should have is reliability. It's crucial that your workforce sees you as someone who is leading the business, and that they can rely on to act in the best interest of the employees and the public. Reliable CEOs deliver on their promises, complete their work, communicate effectively, share company news in a timely manner and have time and resources available for employees. When a CEO is reliable, the staff can trust in the potential of the organization.

11. Passion

Some of the best CEOs are truly passionate about the work they do and the company they lead. This is usually because you believe in the company's mission statement and values and want others to do the same. A passionate CEO wants to see others succeed, so they may develop training programs to support interests and host inspirational meetings where they reiterate the importance of the company values.

Through the interactions a passionate CEO has with all employees in the company, they should also realize greater production numbers, lower employee turnover and staff members who want to perform their work well because it's in the best interest of the organization.

12. Curiosity

Even in a position of leadership, it's important to remain curious. Curiosity means you have the desire to continue to learn, which can translate to realizing you don't have all the answers, asking your employees for guidance based on their strengths and being open to learning from everyone you work with. A curious CEO may ask a lot of questions to better understand people or certain processes. They may attend trainings or conferences to learn more, which can inspire employees to do the same.