In the US the situation varies greatly, depending on the university. In some places the head is hired specifically for that position. In some, he/she is chosen by vote of the faculty. In some, the position rotates among faculty every few years. In some, a distinguished academic is hired to add "stature" to the department.
A head is normally a tenured person, but he/she can hold any rank, especially when the position rotates. Non-tenured but tenure track faculty (assistant professors) are normally spared this duty so that they can spend efforts needed to get tenure.
The head normally, but not always, has teaching duties and possibly also carries on research. But the load is reduced to allow for the administrative duties.
The head makes sure that all of the courses are staffed and that everyone gets paid. He/she is responsible for seeking resources from the common university pool, though not necessarily for grant funding. The head may need to approve some aspects of grants when they employ common resources. The head may need to assure funding agencies that the terms of the grant are fulfilled.
The head normally chairs the inevitable periodic faculty meetings that set strategy for the department and distribute duties to the faculty.
The head manages faculty evaluation and may have a voice (or not) in tenure decisions. Usually, the head can veto a positive tenure decision for financial reasons, but I don't believe it is common to have the power to do so otherwise. I doubt that very many places permit the head to veto a negative tenure decision made by a faculty committee.
The head is the manager of record for any professional staff, such as secretaries.
The head is a shoulder to cry on for faculty with problems and for students with complaints. As such, he/she becomes a sort of mediator.
The head answers to the dean when any internal problems spill over into the wider arena. He/she then becomes the defender of anyone in the department who needs (and deserves) defending.
Normally a person who leaves the head position retains faculty tenure and returns to the normal teaching, service, and research duties.