Chief executives · the career path
How to become a CEO
The short answer · updated
Most chief executives get there by running a profit and loss account, often as managing director, chief operating officer or chief financial officer, then stepping up. Others found their own company. Boards appoint on a record of results, judgement and leadership of people. No qualification is required, though an MBA or director training can help.
The routes in
There is no single path. The Office for National Statistics, describing chief executives in its Standard Occupational Classification (unit group 1111), says entry may be by appointment or internal promotion and is usually based on relevant experience, though some posts may require academic or professional qualifications.
In practice the common routes are these:
- Running a P&L. Leading a business unit, a region or a subsidiary, with its own revenue, costs and people, is the closest thing to the chief executive’s job below it. Managing directors of divisions often step up to group chief executive.
- The seat next door. The chief operating officer and the chief financial officer work closest to the chief executive and see the whole business. Both are common successors, internally or at another company.
- A functional career that widens. Sales, marketing, product and technology leaders reach the top job when they take on a P&L or a general management role on the way.
- Founding a company. A founder is chief executive from the first day. GOV.UK notes that a company director is responsible for running the business; the hard part is keeping the job as the company grows and investors ask whether the founder is still the right person to lead it.
The experience boards look for
The board appoints the chief executive, and it appoints for the job it needs done. The FRC’s guidance to the UK Corporate Governance Code describes the chief executive as the person who proposes and delivers the strategy agreed by the board, works closely with the chair, and sets the example on culture. Boards look for evidence of each.
That evidence usually means results you can point to, such as growth, a turnaround or a sale, with numbers you can explain; a record of hiring and leading senior people; decisions taken under pressure; and time in front of a board, presenting, defending a plan and taking challenge. Sector knowledge matters more in some industries than others.
In regulated financial services the bar is formal. The FCA lists chief executive officer as a senior management function, and anyone who performs one must be approved before starting the role.
Qualifications that help
No qualification is required to be a chief executive. Some help, mainly by filling a gap in an otherwise strong record.
An MBA gives a functional specialist a grounding in finance, strategy, operations and people, and a network. Director training teaches the board’s side of the table. The Institute of Directors’ Certificate in Company Direction covers the role and legal duties of a director, the board, finance, strategy and leadership; it leads to the Diploma in Company Direction and then to Chartered Director, a protected title regulated by the IoD under its Royal Charter, which also requires board-level experience.
Sector and professional qualifications matter where the route runs through a profession: ACA, ACCA or CIMA for a chief executive who came up through finance, CIPD through people, CIM through marketing, or the Chartered Governance Institute’s qualifications through governance. In financial services, FCA approval as a senior manager is an approval rather than a qualification, but no one takes the chief executive seat without it.
Interim or fractional CEO work as a route in
Interim and fractional work lets an executive do the chief executive’s job before a board offers it permanently. An interim chief executive covers a departure, a turnaround or a sale, full-time for a fixed period. A fractional chief executive leads a smaller company for part of the week. Either gives you the experience of being the one who answers to the board.
Both are demanding: an interim is usually brought in when something has gone wrong, and a fractional chief executive has less time than the job seems to need. Done well, either builds the record boards look for. Our interim CEO and fractional CEO pages show how companies hire a CEO for these roles, and list live jobs.
Interim and fractional chief executives often work through their own company, so the off-payroll working rules (IR35) may apply. Status turns on how the engagement runs in practice, and a medium or large client makes the determination. Our IR35 guide sets out the tests.
A non-executive seat as preparation
A non-executive seat shows you the board from the other side: how it sets strategy, holds the chief executive to account, and decides when to change one. That view is hard to get as an executive, and it is exactly what a board will test when it interviews you for the top job.
It also teaches the duties early. A chief executive who sits on the board is a company director, with the duties and filing responsibilities Companies House guidance sets out. Our guide on how to become a non-executive director covers first seats, training and the board CV.
Many executives start with a trustee seat. If the charity sector is where you want to lead, our guide on how to become a charity CEO sets out that route.
What a CEO earns
Pay moves with the size of the company, its sector, its ownership (listed, private equity, venture-backed or family) and its results. A permanent chief executive is paid a salary, usually with a bonus and often with shares or options; an interim or fractional chief executive a day rate.
We do not publish a figure on this page. Our CEO salary page sets out permanent and fractional pay, each figure with its source. For what the job involves day to day, see what does a CEO do?
Questions people ask
Do you need a degree to become a CEO?
No. The ONS occupational classification says chief executives are usually appointed on relevant experience, though some posts may ask for academic or professional qualifications. Many chief executives hold a degree; the record of results matters more.
Is an MBA worth it for becoming a CEO?
It can be, if it fills a real gap: a specialist who has never run a P&L or read a balance sheet gains most. It is not a requirement, and it does not replace experience of leading a business.
What is the most common role before CEO?
Roles that run a whole business or see all of it: managing director of a division or subsidiary, chief operating officer and chief financial officer. Founders skip the ladder by starting their own company.
Can I become a CEO by starting my own company?
Yes. A founder of a limited company is usually its first director and chief executive. Keeping the role as the company grows is the harder test, as investors and the board decide whether the founder is still the right leader.
Does being a non-executive director help you become a CEO?
Yes. A board seat shows how a board sets strategy and judges a chief executive, and gives you governance experience a board will ask about. Our guide on how to become a non-executive director sets out the first steps.
How do companies hire a CEO?
The board, often through a nominations committee, defines the job, runs a search and interviews a shortlist. We recruit fractional, interim, part-time, temporary and permanent executives; every brief gets a shortlist of 3–5, each with pay or day rate, availability and IR35 position set out. See our fractional CEO page.
