Chief Operating Officer - Explained
What is a COO?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP
What is a Chief Operating Officer?
A chief operating officer is the second-ranking executive job position in a company. A person who holds this title is the second in command, after the chief executive officer (CEO). This means that a chief operating officer (COO) reports directly to the CEO. Some organizations use the term, vice president of operations, instead of COO. Another title similar to COO is, Director of Operations, a title commonly used in Non-Profit Organizations (NGOs).
What Does a COO Do?
The role of COO and CEO may seem confusing especially in the organization where there is no clear structure. However, in larger organizations, the responsibilities of these two positions are clearly defined. For instance, in a company with these two positions, the CEO is usually tasked to oversee the successful implementation of long-term goals. On the other hand, the COO has a responsibility of overseeing the company's daily business operations. He or she is also tasked to report the progress of projects to the CEO. The reporting may be monthly, quarterly, semi-annually, and annually activity. In a typical setting, the entrepreneurial experience that the COOs possess is usually more than the CEO. This is because the CEO only develops plans, while it is the COO who is supposed to oversee the implementation of these plans. The COO is also supposed to support the human resource to come up with a strong team. Therefore, only a COO with vast experience can be able to manage all these responsibilities effectively.
Institutions where COO can Work
Individuals with appropriate training, skills, competencies, and experience may have a privilege of working in various institutions like;
- Business institutions
- Government entities
- Non-profit organizations
Duties and Responsibilities of a Chief Operating Officer
Generally, there are no specific responsibilities for a COO position. The duties vary from one organization to the other and how the position is also defined. Below are some of the typical tasks of a chief operating officer:
- Implement strategies established by senior management.
- Support the chief executive officer to achieve the company's mission and goals.
- Offer assistance to an employee, who the company would rather not lose by promoting his or her capabilities in the company.
- Overseeing the company's daily business operations to ensure they are successful.
- Foster a work environment and ensure that it is success-oriented.
- Motivate and lead a team to ensure that it performs high.
Education and Experience
Education and experience are part of the requirements for one to be considered for a COO position. One will require possessing a bachelor's degree as a minimum education requirement. The degree can be in any related field, however, most organizations prefer candidates with a master's degree in Business Administration (MBA). Work experience in the company's industry is also a requirement. An ideal candidate for this position an experience of over 10 years working in the company. He or she should have moved up the ranks within those years. Also, he or she should have held a senior managerial position for at least five years.
Chief Operating Officer Key Skills
Apart from education qualifications, a competent COO should also possess various qualities. Some of these qualities include the following:
- Strategy: They must think strategically. Be creative and able to manage innovation effectively.
- Good Communication skills: Should be able to communicate well in both written and spoken
- Excellent decision-making skills: A competent COO is that who can effectively make decisions.
- Leadership skills: A good COO should possess excellent leadership skills. Ability to lead and supervise a team effectively.
- Good finance Knowledge: Should have knowledge in the management of finances.
- Result-oriented: A chief operating officer must be able to focus on a project and achieve results.
- Ability to delegate duties: Should have the ability to delegate duties effectively.
Salary of Chief Operating Officer
The Chief Operating Officer is the second senior-most position in the company's ranks, which makes it have a competitive salary package. However, the salary package for COO varies based on various factors such as:
- The organization one is working for. Larger organizations tend to offer a high salary package to their COO compared to smaller organizations.
- Area of expertise.
- Level of experience.
- Individual responsibilities.
- Level of education.
Basically, a company with both CEO and COO positions is expected to have a clear reporting structure with clearly defined roles. If the roles are confusing, there will be a power struggle between the two executives, making them dysfunctional. This will also create confusion among the employees. A good relationship between the two is key in ensuring that a company realizes its goals. The two executives will focus on their roles without interfering with the other.
- Corporate Governance Law (Intro)
- What is Business Governance?
- Berle-Means Thesis
- Corporate Governance Rating Definition
- Who are the members of a corporation?
- Corporate Charter
- Shareholder Register
- Common Stock
- Preferred Stock
- Par Value
- Authorized Shares
- Issued Shares of Stock
- Unissued Shares of Stock
- Outstanding Shares
- Institutional Shares
- Dual Class Shares
- What is a closely-held corporation?
- Close Corporation Plan Definition
- What is a Private Company vs a Public Company?
- What is the role and purpose of the corporation?
- What is the Agency theory of corporate governance?
- Shareholder-Centric Perspective
- Shareholder Value
What is the Stakeholder theory of corporate governance?
What is the role & rights of Shareholders in the corporation?
- Shareholder Democracy Definition
- Quorum Definition
- Information Circular
- Straight and Cumulative Voting
- Cumulative Voting
- Plurality Voting
- Class Voting Shareholders
- Changing the Voting Rules
- Supermajority (Voting)
- Shareholder Sponsored Proposal
- What are the variations on attributes of Ownership structure?
- Stock Split
- What are the fiduciary duties owed by shareholders?
- When is a shareholder personally liable for corporate obligations?
- Appraisal Rights
- Dissenter's Rights
- Say on Pay Rights
- How can shareholder enforce their rights (direct and derivative actions)?
- What is the process for bringing a Derivative action?
- What are corporate vote Proxies?
- Proxy Statement
- Proxy Fight or Contest Definition & Explanation
- What is Shareholder Activism and the significance of Institutional Investors?
- Activist Investor
- Overview of Board of Directors
- Board Decision Making
- Advisory Board (Observer Directors)
- What is the role of the Board of Directors?
- Board of Trustees
- Board of Governors
- What is the composition of the board of directors?
- Chairman of the Board
- CEO as Chairman of the Board
- Outside Director
- Outside Director or Non-Executive Director Definition
- Independent Outside Director
- Budget Committee
- Audit Committee
- Compensation Committee
- Nomination Committee (Corporate Board)
- What standards govern the actions of the board of directors?
- Duty of Candor Definition
- Duty of Care (Board of Directors)
- Duty of Loyalty (Directors)
- Board Evaluation Definition
- What is the Business Judgment Rule?
- What is D&O insurance?
- Codetermination (Foreign)
- What is the role of Managers of the corporation?
- What standards govern manager actions?
- Chief Executive Officer (CEO)
- Chief Financial Officer
- Chief Information Officer (CIO)
- Chief Investment Officer (CIO)
- Chief Legal Officer
- Chief Operating Officer
- Chief Risk Officer
- Chief Security Officer
- Chief Technology Officer (CTO)
- What are the primary state and federal corporate governance laws?
- What is the role of the state in corporate governance?
- What is the role of Securities Laws in corporate governance?
- What is the role of the Foreign Corrupt Practices Act in corporate governance?
- What is the Sarbanes-Oxley Act (SOX) effect on corporate governance?
- Sarbanes-Oxley Act (SOX)
- What is the Dodd-Frank Wall Street Reform and Consumer Protection Act effect on corporate governance?
- Corporate Monitors
- What industry organization standards affect corporate governance?
- How do proxy advisory firms affect corporate governance?
- What is the role of ethics in corporate governance?
- What are the major causes of corporate governance issues?
- What are the access to information issues?
- What are decision-making structure issues?
- What are the power struggle or competition issues?
- Holding Company
- What are hostile takeovers and defenses to hostile takeovers?
- Williams Act
- Staggered Board
- Shark Repellent Defenses?
- Poison Pill Defenses?
- Flip Over Poison Pill Definition
Flip In Poison Pill Definition
- Voting Poison Pill Plan
- Delay-Tactic Defenses?
- Legal Lockup Defenses?
- White Knight and Pac Man Defenses?
- Jonestown Defense
- Lady Macbeth Strategy
- Macaroni Defense
- Yellow Knight
- Back-end Plan Definition
- Backflip Takeover Definition
- Dead Hand Provision Definition
- Kamikaze Defense
- Operating Company Property Company Model
- Scorched Earth Policy Definition
- Revlon Rule
- What are benefit-alignment issues?
- Cadbury Rules Definition