Chief Executive Officer

The Chief Executive Officer is the top executive of a company. The English title is usually abbreviated as CEO and literally means something like “leading executive in charge.” A CEO doesn’t decide on small matters like individual orders, but on the broad direction: Which products does the company build? In which countries does it sell? Who gets which role at the leadership level? Above the CEO there is usually still a controlling body, appointed by the owners of the company, which can also dismiss them. In Germany, this role is traditionally called Vorstandsvorsitzender, but many companies now use the English term.

Why a single person carries so much weight

In a large corporation, often hundreds of thousands of people work together. They cannot all agree on a strategy collectively. That’s why there is a top position where the final decisions converge. This makes the company capable of acting, but it also concentrates a great deal of responsibility in a single role.

For investors, the CEO is an important signal. When a well-known company replaces its chief, it often moves the share price, i.e. the price of the company’s shares on the stock exchange. A new leadership can mean: a different strategy, different investments, perhaps job cuts. The news itself doesn’t change a single product yet, but it changes the market’s expectations.

In the tech and AI industry, this effect is especially strong. Many companies were founded by their CEOs and are publicly equated with them. One example is the dismissal and return of Sam Altman at OpenAI in November 2023: within a few days, an entire company was called into question, even though nothing about the technology had changed.

What a CEO actually does all day

The main task is selection and allocation. A CEO decides which divisions get money and personnel and which are cut. They fill the level directly below them: chief financial officer, chief technology officer, heads of individual divisions. These people then run their own areas. You can think of it like a coach who doesn’t play but sets the lineup and game plan.

A large part of the job is external communication. The CEO explains to investors, journalists, and employees why the company does what it does. At publicly traded companies, this includes fixed appointments: four times a year, figures are published and explained in conference calls. Statements made there are legally sensitive because they can move share prices.

It’s important to distinguish this from ownership. A CEO is an employee of the company, not an owner, even though they often hold shares. A founder can be both at once, but an externally hired manager usually cannot. In Germany, the CEO is overseen by the Aufsichtsrat (supervisory board), in the US by the Board of Directors. These bodies also determine their pay, which is often strongly tied to performance.

CEOs in headlines and product launches

The term is most often encountered in business news. Headlines like “Nvidia CEO Jensen Huang unveils new chips” or “The CEO steps down” are standard fare. At product presentations too, it’s usually the CEO on stage, because their announcement is seen as especially authoritative.

Alongside this, one encounters related titles, all built on the same pattern. The CFO is responsible for finances, the CTO for technology, the COO for day-to-day operations. Together they form the top leadership tier, known in English as the C-suite. A common misconception is that the CEO is their superior in a legal sense; formally, in Germany all members of the management board are jointly responsible, and the chairman primarily holds the power to set direction.