Over the last ten years, the role of CEO’s has changed to become a much broader and all-encompassing position than solely managing an organisation and its people. The new expanded role of CEOs is even more pronounced in the new talent era. CEOs are the top talent at the top of the organisation, and to a great extent the success or failure of CEOs drive organisational performance or conversely, organisational underperformance. Thus, as part of the talent agenda of Talent Talks, South Africa’s first talent management platform, the role of CEOs come into the spotlight this week. CEOs are either makers or breakers of talent. They can let talent flourish in their organisations, or they can destroy talent.
Against this backdrop, let us revisit the role of the CEO in the modern talent-driven economy. The traditional role we know is that of Chief Executive Officer, but this role has evolved in recent times, so much so that a new multi-skilled CEO is needed in the modern dynamic work environment. Today “CEO” also stands for a number of new expanded roles:
- Chief Ethics Officer – With the governance requirements and Companies Act and the King IV™ Code on Governance released on 1 November 2016, the CEO needs to be the chief ethics champion in an organisation;
- Chief Environmental Officer – The increased focus on sustainability requires a shift from the profit motive as sole purpose of business, to the triple bottom-line in which preserving the environment becomes a top management responsibility;
- Chief Engagement Officer – Despite the fact that most companies now have HR Managers, good CEOs have assumed the role of Chief Engagement Officer, i.e. to play an active role in engaging and motivating talented employees towards improved performance, in addition to engaging with external stakeholders;
- Chief Equity Officer – CEOs have to create a culture in which differences are accepted and valued, thereby creating diverse organisations based on the principle of equality;
- Chief Electronic Officer – Given the rapid growth in technology and notwithstanding the presence of CIOs, our CEOs are now also the chief electronic officers of their companies – opening doors for increased technology investment and utilisation of technology, including social media based on a clear digital business strategy for the business;
- Chief Excellence Officer – One of the most critical roles of CEOs is to ensure that the company performs, and a commitment to driving and achieving excellence is thus a core competency of all CEOs;
- Chief Entity Officer – Irrespective of the type of organisation – public, private, or non-profit, the CEO is the Chief Entity Officer, and that means within the spirit of King IV™ that the CEO has to ensure that the entity is well governed and managed according to sound governance principles, practices and requirements to the satisfaction of the Board and other stakeholders;
- Chief Equipment Officer – As stewards of the company’s resources and facilities, CEOs need to ensure that all the resources of the company are well maintained and utilised, and as stewards they are therefore the Chief Equipment Officers of their companies;
- Chief Enterprise Officer – CEOs as the top managers of a company is the head of the enterprise, and thus should ensure that the company is well managed and continuously innovate to grow and prosper;
- Chief Evaluation Officer – Ultimately the CEO needs to ask the right questions from managers and check whether the business is achieving its objectives and will hence monitor and evaluate the company in its totality.
In the light of the above new roles of CEOs, it is evident that CEOs need to play a more balanced role in organisations today. Depending on the size of the organisation, directors and managers are appointed to manage some of these roles, but ultimately in the spirit of good governance, and accepting responsibility and accountability, the buck stops with the CEO. Balancing and performing in these roles will contribute significantly to good leadership, management and governance, and hence create more socially responsible and sustainable companies.
The reality is that while CEOs in the past were appointed based on one aspect only, i.e. financial performance, the modern CEO will be required to navigate these ten roles simultaneously. Neglecting any of them at any given time may be the downfall of a CEO. This was already proved when the BP CEO lost his job due to the oil spill in the ocean, and more recently the Volkswagen CEO resigning as a result of the gas emissions scandal, thereby failing their duties as “Chief Environmental Officers” as outlined above.
The key message in this article is balanced performance in all CEO roles. This implies that good or even outstanding performance in one or more roles may not be good enough, if other roles are neglected in the process. Moreover, appointing strong functional directors in areas such as IT, HR, supply chain, environment, finance, operations is essential to mitigate the risk of under-performance in any of these ten roles. The fall of Brian Molefe, outgoing CEO of Eskom last week following the release of the previous Public Protector’s report into state capture is a case in point. Molefe was brilliant as “Chief Excellence Officer” turning load-shedding around into a surplus of electricity within months. However, his alleged involvement in unethical business deals in relation to the state capture by the Guptas, is an example of failure as “Chief Ethics Officer” and eventually contributed to his down-fall.
In the new talent-driven economy, the role of CEOs is multi-faceted. We need the best talented CEOs to manage talent-driven organisations in a balanced way. The best companies will have the most talented CEOs – top talent leaders who can successfully navigate the ten expanded roles of CEOs.