What Do Bank CEO’s Really Do?

While most people know that a Chief Executive Officer is the head of a company, less people know the individual responsibilities and the day-to-day responsibilities of a CEO.
Also known as an Managing Director (MD), CEO responsibilities vary from company to company but they are usually the head of the organisation’s board of directors depending on corporate structure.

How far the CEO extends his power on a daily basis varies on the company but also on the particular managing style of the individual. Typically though, CEO’s choose to delegate many of their responsibilities and orchestrate the company’s activities rather than taking an active involvement of operations. The CEO is the leader of a corporation, as an experienced board member and usually has vast industry experience. As well as consulting with the board, they have the final say on important issues in the company. They can use their power to influence other board members and shape the corporation according to their vision of what should be done for the best.

When the 2008 financial crisis occurred, it was due in part to the role of Fred Goodwin as CEO of RBS. Goodwin pushed through a controversial takeover of Dutch bank ABN AMRO in order to become the first ‘super bank’ – six months later and the bank needed a government bail out to prevent it from collapsing. This essentially crippled the UK economy and five years later the new CEO Robert Hester has managed to place RBS in a position where it can consider selling its publicly owned shares.

Across the Irish Sea, the Anglo Irish Bank was nationalised and the government brought in financial expert Mike Aynsley was brought in as CEO of the newly named Irish Bank Resolution Corporation Limited. Aynsley was successful in reducing the corporation’s asset portfolios from €115 billion in 2008 to around €14 billion. The three key skills of a CEO in banking found in setting the overall vision and strategy of the company and communicating it to stakeholders; finding best talent; and ensuring sure there is always enough money in reserve, the rest is delegated.

Fundamentally, however, CEO’s are responsible for all operations in the corporation and even if something happens which they had no part in, they should have had measures in place to prevent such occurrences. A CEO is still answerable to the corporation’s stakeholders who essentially own the business and can at any time take action to remove or replace the CEO and his board of directors.