When my youngest son was a teenager, he informed me that he wanted to be a CEO when he grew up so he “wouldn’t have to report to anyone.”

Any CEOs reading this will laugh at this notion of what it means to be in charge. My son has since learned that no one has a tougher, more varied set of reporting relationships than the CEO. Yet the worst ones don’t realize this; they deal with issues as if they have no one to report to.

The best ones, however, understand that they have shareholders, customers, employees, suppliers, communities and lenders to serve. They generally do a bit more “tacking” back and forth, as in sailing, than those who power directly toward the distant shore in their high powered motor boat. They realize that their constituents likely have interests that are at odds with each other, and it’s the CEO’s job to make the right trade-offs.

For example, it would be easy to make customers happy by giving them free goods and services – but that would be hard on lenders and shareholders. Likewise, it would be easy to increase profit margins by abusing suppliers – at least in the short term – but in the long run, that would be the undoing of any business.

So, great CEOs are great jugglers. They’re great all-things-considered decision-makers. They hire right. They fire appropriately. They build teams. They remove obstacles. They empower people to be and do their best. They reward what helps the organization win in the short-, medium- and long-term. They communicate lavishly – bad news as well as good. They’re authentic. They have integrity; what they say and do are tightly connected.

They’re also politically savvy, but they’re not politicians. That’s because running a business is not a democracy. It works best with full participation in the decision-making process, but once the debate is over, everyone does their best to implement the decisions made by the CEO.

Having hired, coached and replaced a number of CEOs over the years – and having been replaced myself – I know that succession can be a sensitive issue. This is why the primary duty of the board of directors of any company is to hire the CEO, give him or her great feedback and coaching, and set up a thoughtful succession plan – even for brand-new CEOs.

The marketplace, with all of its vagaries, dynamism and intricacies, is the ultimate master of the CEO. Great CEOs have a sense for their customers and why they’re buying, what the value proposition is and where the market is headed.

This article is published in collaboration with LinkedIn. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Joel Peterson is Chairman, JetBlue Airways. Stanford Business School

Image: A woman walks on the esplanade of La Defense, in the financial and business district in La Defense, west of Paris.   REUTERS/Gonzalo Fuentes