I’ve seen two situations one that sounds a bit like your is poorly managed but isn’t bad, one that is really bad:
1. Co-founder likes to make stuff, build stuff, sell stuff, raise money, etc. but does not like, or care for leading 50+ people. Typically he (always he) keeps the title, a small team of senior or very dedicated people, and do whatever he is actually good at. At the same time, a newly appointed, experienced VP does the actual management of the larger team, while nominally reporting to the CxO. This is a good way to avoid drama while the reality of the situation dawns on the co-founder: his report is doing all the grown-up work. You don’t like that work. It’s CxO type of work… so you shouldn't squat the title any longer. It takes a while, though.
The benefits: the VP has ample time and an incentive to prove they can handle the weirdness of a board, and get promoted to SVP, or CxO when their role gets more obvious. They are easier to replace if they underperform or don’t indulge in the CxO delusion long enough. It’s unfair, but it works and most people end up finding what they need in time.
2. Someone was CyO at the previous company, and was able to coast long enough while that first project crashed and burn. Before it did, that someone was hunted to be a new company to be CyO because… well, they look like they know what they are doing. No one at the new company knows what a good CyO does. So they can continue coasting. And it can hurt so many great people who need support.
I’ve seem both at the same time, and it’s painful to see so many people miss what is the problem.
“But so-and-so it’s really CxO!
— Who cares? VP of x is doing great work
— They fight with CyO all the time
— Yeah, because CyO is incompetent and does nothing…”
Titles don’t really matter: if someone has an inflated one, it shouldn’t make them too dangerous. Lack of feedback does: the CxO gets asked to work on special projects and is happy. The CyO is not told to get his shit together, and everyone suffers.