Salaried CEO: Who do you work for?
As a salaried CEO, is your obligation to the company, or to the owners?
When the owner’s best interest is not the same as the company’s best interest, how to do choose?
It might feel natural to jump to the conclusion that your obligation is to whomever pays the bills—or your salary. But when you’re actually in the position of Chief Executive Officer, with a staff who depends on you for strong and steady leadership and sound decision making, when you’re the face of the company and your reputation is on the line, when you know that any failure will fall on you… it doesn’t feel that simple.
In my own experience, I have always felt that my obligation is to the company.
Every decision I make, every project I take on, every conversation I have, I ask myself, “is this in the best interest of the company?” long before I ask “is this in the best interest of the shareholders?”.
What what exactly do I mean by “the company”? It’s all encompassing—but it starts with the people.
The people who choose to get out of bed every day and come to work with me are my top priority, always. I can’t do every function of the business on my own—so without them, the business suffers. If they’re unhappy, they don’t perform as well and the business suffers. If I have constant turnover, people aren’t there long enough to maximize their efficiency and the business suffers. If the operation of the business suffers, the product suffers and you lose customers. It’s a domino effect straight to the bottom line, which, in turn, will make shareholders or owners unhappy anyways.
So when I think about who I work for as a hired gun or salaried CEO, it’s for the company.
If you’re lucky enough to work for shareholders who you can agree with on foundational principals and matters of integrity, you might have a pretty good gig! If you find yourself beholden to a master, despite your title, who you constantly disagree with on the fundamentals of business and people management, you might need to explore your options.
So, what are your options? The way I see it, you have a few things to consider.
Let’s say you want to stay (or can’t afford to leave):
a. Decide that despite your authoritative title and the enormous responsibility you shoulder on behalf of the company, you still just work there. Swallow your pride and do what your bosses want because that’s the job. If you want to do things your way, you need to own the company.
b. Attempt to negotiate a partnership so that your voice is more equally heard, and you at least have voting rights. Note that this option will come with the risk that your boss (or bosses) decide you’re too ambitious for their needs and start looking to replace you.
c. Keep banging your head against the wall and fighting the good fight—but be forewarned: People who hire a CEO but don’t give them any real authority don’t want your opinions. They want a puppet who will execute what they want, the way they want you to execute it. Unless you take a stand, things probably won’t change.
Let’s say you’re ready to take the leap:
a. Bet on yourself—Draw a hard line in the sand and require a seat at the table in exchange for your continuation as CEO. They will either cave, or let you walk. Either way, you took your shot and should have no regrets.
b. Bet BIG on yourself—and walk away. If you’re good, chances are you’ll land another opportunity.
At the end of the day, your obligation is to yourself. Do what’s right, and do what’s best for you, your career, your future and always… the company.