President vs. CEO: Key Differences
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Summary:
A chief executive officer and a company president are considered two of the most important roles in corporate governance. A CEO oversees the company’s strategic goals and reports to the board of directors, while the president is responsible for more of the hands-on implementation of corporate goals into the workforce. In some cases, the company president also serves as the CEO. When it comes to small businesses, the president might also be the owner of the company.
Titles like CEO, president, and COO are thrown around on the news and in popular culture. However, it’s not often that we actually get a detailed description of what these people actually do, and why their jobs are so important.
The difference between president and CEO particularly can be a confusing one to delineate, especially because sometimes the role can be held by the same person. The entire company looks to these two positions for guidance and implementation of day-to-day operations, regardless of whether that company has ten employees or ten thousand. The difference between the CEO and president is an interesting look into the structure of corporate governance and hierarchy.
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What is the CEO’s role?
A chief executive officer (CEO) is typically considered the highest-ranking executive in the company. A CEO oversees the strategic operations of a company and takes care of the most important corporate decisions. In a publicly-traded company, the CEO usually serves as the chairman of the board of directors as well.
Further, the CEO is often the public face of the company. This role includes interacting with the public through community events, chamber of commerce meetings, and more. The CEO may also serve as the company’s top salesperson, meaning they are responsible for making high-level sales pitches and announcing new products and services on behalf of the company.
What is the president’s role?
The president of a company is responsible for more of the hands-on implementation of corporate goals into the actual workforce. In a corporation, the president typically refers to someone who serves as the leader of a segment of the company overall. The president is also required to report back to the board of directors on company activities.
In some instances, the company president also serves as the CEO. Particularly when it comes to small businesses, the president might also be the owner of the company. Both a CEO and a president are responsible for maintaining the functionality of the company, and, when the company is publicly-traded, for helping upkeep shareholder value.
Who is higher: a CEO or president?
In most companies, the CEO is considered to be ranked higher than the president. The CEO is usually the highest-ranking officer in the company, and the president is the second in command.
However, depending on the company, there might be differences between the two roles, such as individual responsibilities and involvement in day-to-day operations. Additionally, if the same person serves in both the CEO and president roles, typical duties might be handled differently than if they were two separate people.
Is the CEO higher than the owner?
For large companies, such as corporations or publicly traded companies, the CEO is the highest-ranking officer. Smaller companies, including small businesses, are more often run by the business owner. If this is the case, the owner could also serve as the CEO.
Additionally, CEOs are usually appointed by a board of directors, while owners exist in their role as the sole proprietor of a business and are responsible only to their customers. CEOs can also have a variety of names depending on the company, including managing director and executive director.
Is the title “owner” the same as “president”?
While the owner of a company can hold the role of president, typically they are two different positions. If it’s a small company, the owner might hold dual roles of president or CEO. However, once the company starts growing and expanding, the owner typically looks to hire outside people to fill the roles of executive officers.
What’s the difference between a CEO, president, and chairman?
The chairman of the board of directors is typically ranked higher in the corporate structure than the CEO and president and is often the highest-ranking executive in the company. The chairman and the board of directors are the people who have the power to hire and fire the CEO and president.
The CEO might also serve as the chairman of the board of directors in some companies, but this role is rarely held by the company president. When the CEO serves as the chairman, they are responsible for answering the shareholders and integrating decisions made by the board of directors into everyday facets of company strategy.
What position is higher: chairman or president?
The chairman ranks higher than the company president, as they have the ability to hire and fire the president. Also, while the president typically controls the company on a more department-level basis, the chairman is responsible for seeing the company as a whole.
The chairman also holds a duty to the board of directors and the shareholders that the president does not. Both the chairman and CEO want to maintain shareholder value at virtually all costs, while the president is focused on ensuring the functionality of the company.
Pro Tip
Publicly-traded companies have multiple levels of corporate hierarchy and have certain company reporting requirements to meet. Shareholders hold sway in the company’s decisions, and the company’s stock price can play an outsized role in meetings and other proceedings.
What are some other roles in the corporate structure?
Apart from the three main roles of CEO, owner, and president, there are other executive positions in the corporate structure.
Chief operating officer
The chief operating officer (COO) is a role sometimes held by the president, but not always. The COO is responsible for the day-to-day operations of the company, and also has various vice presidents reporting to them.
The COO usually reports directly to the CEO and is often considered second in command. They are focused on executing the company’s business operations and corporate management policies and implementing the long-term vision of the CEO.
Chief financial officer
The Chief financial officer (CFO) manages the company’s finances. They are part of the company’s high-ranking executives and handle duties like cash flow, taxation, and financial planning for the company.
CFOs typically hold advanced degrees and have the chartered financial analyst (CFA) designation. They are responsible for knowing the ins and outs of regulations adopted by bodies like the Securities and Exchange Commission (SEC). A CFO’s primary concern, however, is to ensure the company remains on track financially. If a CFO is concerned about a company’s financial position, they may recommend looking into a business loan.
Executive director
An executive director has duties similar to those of a CEO. That being said, this role is most often designated for those at the helm of nonprofit organizations. For tax purposes regarding nonprofits, executive directors often earn less than CEOs.
They hold many of the same responsibilities as for-profit organizations’ CEOs. This may include overseeing a nonprofit’s strategic planning and ensuring all projects operate within the nonprofit’s budget.
Vice presidents
The vice president can be ranked in various spots in the corporate hierarchy depending on the size of the company. But most often a vice president is considered a senior executive.
For example, in a smaller company, the vice president might be the second in command to the president. However, in a larger company, they typically rank lower than the higher-ranking executives such as the CEO, COO, and president.
Key Takeaways
- A CEO oversees the strategic operations of a company and takes care of the most important corporate decisions. They can also serve as the chairman of the board of directors, or as the president.
- The president of a company is responsible for more of the hands-on implementation of corporate goals into the actual workforce. The president can also serve as the CEO.
- In a small company, the owner might also serve as the CEO or the president. A smaller business may also require the vice president to hold a larger role than in a corporation.
- The chairman of the board of directors has the ability to hire and fire both the CEO and the president, as well as hold their ultimate responsibility to the company shareholders.
- While the CEO and president want to maintain the functionality of the company and its day-to-day operations, the chairman wants to uphold value for the shareholders.
- The COO, CFO, executive director, and vice president are other common roles in the corporate structure.
Related reading: In the event of a merger or acquisition, either a president or CEO might benefit from a so-called “golden parachute.” To learn more, read SuperMoney’s Golden Parachute: Meaning and Examples.
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