Chief executive officer (CEO) Question: Download CEO PDF
What is the fourth main duty of CEO?
Answer:
Capital allocation is the CEO's fourth main duty. The CEO sets budgets within the firm. They fund projects which support the strategy and ramps down projects which lose money or do not support the strategy. They consider carefully the company's major expenditures and manages the firm's capital. If the company can not use each dollar raised from investors to produce at least $1 of shareholder value, they decide when to return money to the investors. Some CEOs do not consider themselves financial people but at the end of the day, it is their decisions that determine the company's financial fate.
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