Do we need a CEO?

Hi Aunty B,

Last year our organisation went through massive turmoil. The CEO was given his marching orders and since that time we have been working under a flat organisational structure with key roles reporting to the board (of two directors).

We’re an SME with about 30 employees. Internally we do not perceive the need for a CEO, but when chatting yesterday at a networking event the first question raised was, “So who’s taken the role?”

What is your opinion on the position of CEO? For smaller companies is it just a nominal title (as I know of one to three-man companies who have a CEO) or do you think the role itself is required from an external perspective?

Your opinion would be welcomed.

Regards,
Madeline

Dear Madeline,

My son came into the office the other day because universities have even more holidays than private schools, if such a thing is possible.

Anyway, at the end of his shift he told me that as far as he was concerned I didn’t do anything.

“Everyone is really hard at work and you’re the boss but all you do is have meetings,” he said.

Exactly, I told him. It’s my job to drive the business forward, set aggressive targets and ensure they are met. And I do that by meeting with the key leaders of the team and clients on a regular basis to make sure our collective feet stay hard on the accelerator.

His eyes glazed over and he had stuck those white thingies in his ears and couldn’t hear me anyway. But Madeline, I am sure you are listening. Of course you should have a CEO. You are a medium-sized business. You need a proper board with an independent director, a chairman and someone to run the place, ie. the CEO.

Ideally one of the directors (and I assume both are owners) would become CEO and the other chairman. The chairman runs the board, determines strategic priorities, handles shareholder issues, sets agendas and runs board meetings.

The CEO runs the joint and is ultimately responsible for the day-to-day. It is a clear structure that everyone understands.

Under the structure you have now, who are the directors accountable to? No one! If they stuff up, they are hardly going to sack themselves. And it is too easy to excuse poor performance. Also, if they are running the day-to-day business operations, who is thinking about the big picture?

You sound like a sensible sort. Put your hand up!

Good luck!
Your Aunty B

To read more Aunty B advice, click here.

Email your questions, problems and issues to auntyb@smartcompany.com.au right now!