20-minute diagnostic
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Perspectives / Advisory perspectives

Clarify the operating agreement between CEO and COO

A CEO and COO walk side by side through a quiet industrial site, discussing their responsibilities

A COO may be responsible for delivery across functions while depending on authority that overlaps with the CEO's. Trouble starts when the two leaders use different assumptions about where that authority begins and ends.

The role needs an explicit operating agreement that can survive pressure.

Clarify the decisions

List the recurring choices that create confusion. These may involve hiring, capital spending, customer exceptions or the order of major projects. For each, name the decision owner, the people to consult and the conditions requiring escalation.

Discuss a real example rather than agreeing that the COO owns operations. Broad language can conceal the disagreement until the next difficult decision.

Two male executives sit together on a terrace, visibly relieved after an honest conversation

Make the arrangement visible to the leadership team. Managers should not be able to obtain contradictory answers by approaching the two executives separately.

Give the partnership a review rhythm

Reserve time for the CEO and COO to examine exceptions and emerging conflicts. This should be a place to improve the agreement, not a second approval meeting for every operating decision.

When the CEO intervenes, explain whether the issue crossed a defined boundary or whether the boundary itself needs revision. An unexplained intervention teaches the organization to keep checking who is really in charge.

Assess the arrangement through delivery, decision delays and the number of issues reopened by conflicting instructions. The COO role varies between companies; a clear agreement should reflect the actual business rather than an idealized description of the second-in-command.