What Skills Should a CEO Have?

By Indeed Editorial Team

Updated March 1, 2021 | Published March 30, 2020

Updated March 1, 2021

Published March 30, 2020

Many companies use a standardized corporate hierarchy for their employees. The highest point on the hierarchical pyramid is usually the CEO, who carries enormous responsibility for the company. CEOs benefit from using certain skills and behaviors to inform their work and leadership.

In this article, we explain what a CEO is, describe 10 necessary skills for CEOs and show the impact a CEO has on a company.

Related: How To Become CEO of a Company

What is a CEO?

A chief executive officer, or CEO, is the highest-ranking executive in a company or organization. In large corporations, the company's board of directors and shareholders elect the CEO. In smaller companies, the CEO may be the company's founder.

CEOs are responsible for making important business-wide decisions and managing overall operations for the company. They communicate with the board of directors and function as the public face of the company. In large corporations, CEOs work closely with other C-level executives, namely the chief financial officer, or CFO, and chief of operations, or COO. In smaller companies, the CEO may be responsible for managing the duties of the CFO and COO if those positions don't exist in that business.

Related: How To Write a CEO Resume: Examples and Tips

10 skills every CEO should have

Employees know CEOs well, as does the general public in the case of large corporations, because of the CEO's client-facing responsibilities. For that reason, CEOs must demonstrate specific skills, both hard and soft, that show their executive mastery.

Here are 10 of the most important skills CEOs should develop:

1. Clear communication

CEOs must communicate with their employees using concise, easy-to-understand language. Employees must understand why a CEO makes certain decisions or how new processes and procedures will impact their day-to-day duties and responsibilities. Additionally, CEOs are responsible for maintaining morale and company culture with their guidance.

2. Collaboration

Collaboration with other C-level executives, department heads and the board of directors ensures that CEOs have the best information and ideas to move the company forward. CEOs who work with their employees and colleagues can discover new, creative ideas and solutions through collective brainstorming.

3. Open-mindedness

CEOs should be open to new ideas and methods. It's essential to establish a company culture in which the head of the company shows they care about progress and novel ideas for doing business. Open-minded CEOs encourage company employees to try new processes and procedures, improving the business overall.

4. Approachability

Excellent CEOs are friendly and approachable. Employees should feel comfortable sharing ideas or communicating with the CEO. CEOs must solicit feedback from employees to make important decisions about company direction and internal structure.

5. Transparency

Employees, the board of directors and the public must trust the CEO. Transparency and authenticity increase trust in the CEO and thus increase trust in the CEO's decisions and leadership. Employees may dedicate themselves to a project more if they understand why it's important to the health and goals of the company.

6. Growth mindset

A growth mindset is the deeply held personal belief that setbacks lead to deeper learning and future success. CEOs with growth mindsets welcome obstacles as learning opportunities. Modeling a growth mindset is also useful as a CEO to encourage the organization's employees to develop their own growth mindsets.

7. Ethics

Ethical leadership is fundamental for a company to maintain its reputation. A CEO with strong ethics can help companies successfully navigate challenges. CEOs who expect their employees to act ethically can establish an honest and open company culture that potential employees want to join and the public can trust.

8. Decisiveness

CEOs should be comfortable making confident decisions. A company's leadership must remain committed to ideas once they have chosen those ideas. Internal and external stakeholders see a decisive CEO as a strong and capable leader who is sure of their company's direction.

9. Creativity and innovation

Adaptability and innovation are often the keys to a company's long-term success. CEOs must think creatively and welcome new, inventive ideas to keep their business relevant and progressive. CEOs who value dynamic growth are more likely to helm profitable businesses.

10. Fearlessness

Navigating novel situations or tests are a regular part of a CEO's job. Fearless CEOs expect and look forward to finding creative, resourceful and profitable solutions to the challenges that accompany a growing business. Modeling a fearless attitude is a great way for CEOs to instill this quality in their employees.

Related: What Is a CEO?

Importance of these skills for a CEO

Out of every employee in a company, a CEO's demonstrated skills might be the most valuable because of their highly public position. CEOs are responsible for a variety of internal and external duties that impact employees, the board of directors, stockholders and customers. To maintain the confidence of these stakeholders, CEOs should develop and use these important skills in all business interactions.

The impact a CEO has on a company

A company's CEO is one of its most important employees because of their high-profile responsibilities and duties. CEOs have an enormous impact on many aspects of their business:

Stock value

A CEO can impact a company or corporation's perceived stock value. A trustworthy, decisive, actionable CEO is more likely to see a higher stock valuation than a CEO without these qualities.

Company culture

The company's CEO determines the company's culture through their actions and expectations. Productive, positive company culture begins with a CEO who is trustworthy and open-minded.

Weighty actions

CEOs, particularly those of large corporations, are often in the public sphere. Their actions and conversations carry great weight for the company's perception and success. Additionally, since they often speak for the company, they should always consider what they say carefully, both personally and professionally, before they say it.

Business reputation

Sometimes, a company's entire reputation rests on its CEO. Because of this, CEOs must act with decorum and integrity at all times.

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