A senior management team consists of top-level employees who work together to manage an organisation. Headed up by the chief executive officer (CEO), this group of individuals sits at the top of a company’s structure and provides strategic steer. Senior management typically comprises several well-defined roles that oversee activities in different parts of the business.
As an established SME or larger firm, you may be thinking about expanding your existing senior management team to accommodate growth or instating a board of directors before becoming a public limited company (PLC). This guide explains everything you need to know. Join us as we explore the function of senior management teams, their structures, and the roles within them.
The role of a senior management team
The senior management team plays a number of vital roles within a business, including:
- Devising an appropriate strategy and ensuring it is implemented effectively;
- Setting ambitious yet achievable goals, then managing teams to work towards them;
- Coordinating activities in functional departments (i.e. finance and HR);
- Organising the management of resources within the firm;
- Managing the demands of stakeholders through the board of directors.
What is a board of directors?
A board of directors is appointed to represent the shareholders of a firm. Public limited companies (PLCs) are legally required to have a board of directors in order to ensure that senior management teams are held accountable to those who own shares, acting as a fiduciary. In most cases, the board will feature both external members (non-executive directors) and internal members from the senior management team (executive directors).
As part of its role in overseeing the senior management team, a board of directors is required to:
- Appoint and, if necessary, dismiss senior executives (particularly the CEO);
- Contribute to the setting of company goals;
- Structure dividend payouts to shareholders;
- Set the salaries and compensation of the senior management team;
- Ensure that the business is being managed effectively and targets are achieved.
Positions in a senior management team
A typical senior management team structure is made up of top-level executives such as the CEO and company vice president (VP), in addition to those in charge of functional departments such as finance and marketing. We’ll dig deeper into each of the roles in the structure and their responsibilities below.
Company Vice President (VP)
The company VP acts as a leadership figure within an organisation. They are often second in command behind the CEO (who will also act as the president). Some businesses have separate president and CEO roles – in this scenario, the VP supports the president with tasks they don’t have time to see to.
The responsibilities of a VP include:
- Supporting the CEO with key business decisions;
- Setting the firm’s strategy in partnership with the CEO;
- Liaising with departments to ensure they achieve their goals and contribute to the wider company;
- Monitoring performance in relation to competitors and implementing improvements;
- Overseeing relationships with partner firms and high-profile clients;
- Working with the chief financial officer (CFO) and other senior executives to set departmental budgets.
Experience/qualifications required: a bachelor’s in business or a relevant subject (often a master’s is preferred) and at least 10 years of experience.
Average salary: £99,804 per annum (range of £66,000 – £151,000)
The chairman (or chairperson) heads up the board of directors. Holding a position on the board and the senior management team, they serve as the bridge between the two and liaise with senior executives to ensure they achieve the organisation’s targets. A chairman represents their business publicly and plays a key networking role.
Whilst the roles share similarities as public figureheads for the firm, the difference between a chairman and a CEO lies in the teams they lead: a chairman oversees the board of directors with a high-level policy focus, whereas a CEO is in charge of the senior management team and has more of a strategic and operational role. In some cases, one person holds both titles (for example, James Quincey is the CEO and chairman of Coca-Cola).
The chairman’s roles include:
- Communicating with shareholders and stakeholders;
- Representing the business to the outside world and ensuring that its policies, aims, and ethos are understood;
- Acting as the chair of general meetings and board meetings (setting the agenda, directing discussions, noting the contributions of directors, and reporting back to the senior management team);
- Determining the size of the board and the directors who sit on it.
Experience/qualifications required: no educational requirements but at least 10 years experience in a role that requires strong communication skills.
Average salary: £68,784 per annum (range of £29,000 – £239,000)
Chief Executive Officer (CEO)
The CEO sits at the top of the senior management team structure and is ultimately responsible for the operational success of the company. Working closely with the other senior executives and the board of directors, they will make top-level decisions that govern the direction in which the business goes.
There is often confusion around the roles of the CEO and managing director. The difference between a CEO and a managing director is that the former reports to the board and oversees the company’s progress from a strategic standpoint, whilst the latter comes under the authority of the CEO and manages day-to-day operations.
The CEO’s roles and responsibilities are to:
- Set the strategy for the organisation with the support of other senior executives and the board of directors;
- Decide on top-level business goals through discussions with the board and senior management team members such as the company VP;
- Ensure that the organisation is implementing its strategy effectively and achieving targets;
- Report back to the board of directors on the company’s progress;
- Work with the chairperson to communicate with shareholders and the public;
- Delegate critical business tasks to the senior executives that lead functional departments and ensure that they are achieving their goals.
Experience/qualifications required: as well as a bachelor’s degree in a relevant subject or a Master of Business Administration (MBA), CEO’s are expected to have long-term experience in the sector and expertise in relation to the company itself.
Average salary: £91,057 per annum (range of £56,000 – £147,000)
Chief Operating Officer (COO)
The chief operating officer (COO) is in charge of overseeing company operations and reports directly to the CEO. They are required to take a high-level view over all areas of the business (e.g. HR, finance, and marketing). The COO works closely with the senior executives who are responsible for these departments to ensure that they work together to achieve company goals.
The responsibilities of a COO include:
- Overseeing the daily operations of the company across all departments;
- Ensuring that individual departmental and wider business goals are achieved;
- Evaluating the organisation’s performance and reporting metrics back to the CEO;
- Managing relationships with partners and vendors;
- Working with the CEO on the setting of the company strategy and goals.
Experience/qualifications required: a bachelor’s or master’s degree in a relevant subject (often related to business) and at least 10 years of experience in a role that requires aptitude in decision-making, public speaking skills, and a top-level understanding of various functional departments.
Average salary: £83,643 per annum (range of £45,000 – £149,000)
Chief Financial Officer (CFO)
The chief financial officer (CFO) heads up the finance department of an organisation and is responsible for monitoring and optimising its financial performance, reporting to the CEO. They are ultimately liable for all financial reporting and ensuring that targets for return on investment (ROI) are achieved.
The roles required of a CFO include:
- Overseeing the preparation of historical financial reports to be presented to shareholders, investors, government bodies, and the public;
- Managing cash flow within the business and ensuring that there is sufficient liquidity;
- Financial forecasting to predict cash flow going forwards (and reporting this to shareholders and potential investors);
- Leading the finance department and working closely with the commercial team to ensure that a satisfactory ROI is achieved across the business as a whole.
Experience/qualifications required: a bachelor’s or master’s degree in finance, economics, or management alongside professional finance qualifications such as ACCA or CIMA, as well as at least 10 years of experience in a senior finance role.
Average salary: £98,025 (range of £51,000 – £159,000)
Chief Information Officer (CIO)
Chief information officers (CIOs) are senior-level executives in charge of the management and implementation of computer technology and data within an organisation. Whilst this role involved technical tasks with databases and internal computers in the past, it has evolved to become more of a strategic position. The CIO reports to the CEO, ensuring that the business remains competitive from a technological standpoint.
The main responsibilities of a CIO include:
- Managing the head of IT to ensure that the necessary technologies are in place to support business operations;
- Overseeing the company’s technological strategy and keeping it competitive as advancements such as cloud computing and big data analytics become industry standard;
- Predicting future changes within the industry and enabling the organisation to adapt to new technological advancements and requirements;
- Introducing new software to ensure that the business runs effectively and taking overall responsibility for digital assets such as the website.
Experience/qualifications required: a degree in a technology-related discipline, as well as long-term experience in a senior technological role.
Average salary: £82,500 per annum (range of £54,000 – £167,500)
Chief Marketing Officer (CMO)
The chief marketing officer (CMO) is responsible for overseeing the organisation’s marketing and sales strategy, reporting to the CEO. They will manage the directors of these departments to ensure that organisational goals are achieved in relation to growth and business development.
The roles of a CMO include:
- Increasing brand awareness whilst ensuring that the internal vision of the brand’s identity aligns with public perceptions (brand image);
- Establishing the budget for marketing and sales;
- Setting marketing and sales targets and monitoring the performance of these departments;
- Maintaining an understanding of how customers interact with the brand and developing its position within the market;
- Heading up the organisation’s approach to customer services and relationship management;
- Overseeing product development and instigating new initiatives.
Experience/qualifications required: a bachelor’s or master’s degree in marketing or a business-related subject, plus at least 10 years of experience in a senior marketing role.
Average salary: £104,256 per annum (range of £61,000 – £179,000)
This guide has explored the function and structure of senior management teams. Along the way, we’ve looked into the relationship between senior management and the board of directors as well as individual senior executive roles, their lines of report, and their responsibilities.
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