At The Money: What the Best CEOs Actually Do

Barry Ritholtz interviews Nitin Nohria, former dean of Harvard Business School and author of "The CEO: The Role, the Reality, the Responsibility," about what the chief executive's job actually involves. Nohria argues the role is less about making every decision than about building the architecture — resource allocation, strategy, culture, execution standards — within which others decide. The conversation also covers why experienced leaders find the job a surprise and how much of a company's performance is attributable to the individual CEO.

1. Nohria says capital allocation is one important part of the CEO job, but the broader task is creating the conditions for decisions made across the organisation to be ones the CEO can endorse.
2. He describes the job as shaping resource allocation, strategy, culture and the processes and standards by which things get executed.
3. At Harvard's new CEO workshops, participants run companies averaging about $17 billion in revenue and arrive with roughly 25 years of executive experience, yet describe the role as the steepest learning curve of their lives.
4. Nohria cites 20 years of data showing individual CEOs account for about 15% of company performance, close to the effect of switching industries, while macro and interest-rate shocks account for about 5% of performance variation.