CEO and president roles of a company are usually the two top management positions within an organization, often held by different individuals in some instances. Their respective responsibilities, powers, and goals often differ significantly; though there may be overlap in some tasks between roles; ultimately they serve as complementary complements rather than competition for these jobs’ titles.
Presidents and CEOs tend to share many similarities, like brothers rather than identical twins. Both often possess some of the same traits; from an outside viewpoint it may appear as though their roles are identical or at least similar; but, from an inside viewing they differ significantly; generally speaking a president typically focuses on long-term planning while CEOs typically deal with day-to-day strategies for meeting long-term goals.
In the U.S., Chief Executives (CEOs) are more uncommon than Presidents; more often than not a firm will feature both an incumbent President and an unknown Chief Executive; often these founders serve as CEOs themselves.
Why is Differences Between CEO and President?
Companies often utilize several positions for managers within them. Each designation comes with its own set of roles and responsibilities – the two most notable of these being President and CEO. Their respective responsibilities may sometimes become unclear to people so this article aims to shed some light on these two posts to dispel any confusion between them.
CEO vs President
A CEO is the top employee in any company and is accountable to its board of directors. Their primary responsibilities include ensuring profitability in business operations as well as moving towards expansion through constant promotion and direction of expansion initiatives. CEOs understand they have to win favor with their superiors (director’s board) by producing profits for the business. CEOs play the role of an entrepreneur with an ambitious plan for their organization and its success, earning respect from their colleagues who recognize their leadership skills. As CEO, you are the liaison between the executive board and other department heads within your organization, while overseeing management performance and developing strategies to help achieve its goals.
Presidents tend to follow CEOs within the management chain and are given responsibility for running the business on behalf of the latter. Presidents oversee daily operations and sign checks; ensure raw material supplies meet demands; sign checks with investors/media; as well as monitor overall company operations/sign checks etc. While CEOs handle investor relations/media relations/public perception issues/media requests/responsibilities etc, presidents remain accountable for keeping things moving at their respective companies by fulfilling any duties assigned to them from above – they are ultimately in charge under direct oversight from the CEO.
There have been instances in which one individual serves as both the President and CEO, making their responsibilities nearly doubled. In these situations, however, often employees step forward and manage the company successfully.
How the Jobs of CEOs, Presidents, and CEOs Differ
American corporations can freely choose how they define leadership and whether a single individual may fulfill multiple functions simultaneously, so these distinctions may or may not be useful in understanding how 2 roles differ.
A Chief Executive Officer is the highest business executive. Their president typically comes in second; sometimes this individual may even be known as “the chief operating officer (COO). Finally, these executives report to directors – collectively known as a board. The COO or president reports directly to the CEO and can be appointed or dismissed from this executive at any time. Furthermore, information can also be gained from other C-Suite executives like their chief financial officer. Vice presidents provide answers to the president, such as executive vice presidents and group vice presidents. Furthermore, higher-level staff such as general managers often report directly to chief operating officers.
Focus A CEO’s main purpose is spotting opportunities and setting long-term strategic goals for their company, while their president must concentrate on running a daily business efficiently in order to meet those long-term strategies.
Duties The goals of CEOs typically encompass larger goals like increasing shareholder wealth, growing market share, and building an effective corporate culture. On the other hand, presidents tend to concentrate more on the implementation of marketing strategies, cost cuts, and similar issues; their main focuses are often marketing strategy, cost cutting, or similar issues. Both jobs may differ in scope – the CEO may oversee all areas of their company whereas presidents might focus on operational departments exclusively or interact more frequently with executives at lower levels as well as external clients and suppliers – in some companies multiple presidents each responsible for an operational division – depending on company requirements.
Relationship with the Board
CEOs typically serve on boards as directors as well. CEOs are in constant communication with directors, particularly their chairman, as well as members of the general public. Presidents tend not to sit on these boards directly but may appear before them for presentations or provide members with additional information.
Planning for Success
One area where the CEO and president may share subordinate duties is succession planning for their positions. A candidate is chosen and hired as CEO upon discretion from directors; then stays in their role according to that same discretion of directors. Oftentimes the board forms a team consisting of both members as well as HR departments from companies plus external consultants for this process.
Once a team has reviewed or clarified a company’s strategic objectives and identified any weaknesses, opportunities, and strengths it must address, they create criteria for prospective candidates that must meet. They then determine to what extent outside candidates may not be considered further and present an incentive package for approval by the board.
Similar Job Titles
In various types of organizations, positions that resemble presidents and CEOs may be necessary. Non-profit organizations frequently entrust the executive director with fulfilling this function; similarly in business for-profit companies.
In partnerships, the managing director usually holds the highest-ranking executive role. Their responsibilities may resemble that of both CEO and president in companies organized as corporations.
The Bottom Line
At first glance, CEOs and presidents may appear similar. However, their roles and responsibilities differ considerably in practice. Chief executives tend to focus more on strategic matters that provide long-term measures of success for their board; presidents (also referred to as chief operating officers) oversee the daily implementation of CEO plans while reporting directly back to them.
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|Role and Responsibilities
|The CEO is the highest-ranking executive in the company. They have overall strategic and operational responsibility for the organization. They make major corporate decisions, manage resources, and drive the company’s vision and mission.
|The President’s role can vary based on the organization. They might oversee specific divisions, regions, or functions within the company. Their responsibilities are generally more focused and operational compared to the CEO’s broader strategic role.
|The CEO has ultimate decision-making authority in the organization. They are accountable to the board of directors and shareholders.
|The President’s decision-making authority is typically limited to the areas they oversee and manage. They report to the CEO or the board of directors.
|The CEO is primarily focused on setting the overall direction, vision, and long-term strategy of the company. They are responsible for driving growth, innovation, and market positioning.
|The President’s focus is often on executing the strategies set by the CEO. They are responsible for day-to-day operations, ensuring efficiency, and achieving short-term goals within their designated areas.
|The CEO usually reports directly to the board of directors and may also hold the position of Chairman of the Board in some cases.
|The President typically reports to the CEO, and their interactions with the board may be more limited compared to the CEO’s interactions.
|The CEO often represents the company in external matters, including investor relations, media interactions, public appearances, and partnerships.
|The President may also represent the company externally, but their focus is more on operational matters within their designated scope.
|The CEO provides high-level leadership, establishes the company’s culture, and sets the tone for the entire organization.
|The President provides leadership within their specific area of responsibility and aligns their team with the company’s broader objectives.
|The board of directors is responsible for selecting and appointing the CEO. Succession planning for the CEO is a critical board responsibility.
|Succession planning for Presidents might occur within specific divisions or functions, and appointments are often made by the CEO or executive team.
|CEOs typically receive higher compensation due to their overall responsibility and strategic role in the company.
|Presidents’ compensation can vary based on their specific role and scope of responsibility within the organization.
CEO vs. president issues are just one component of corporate governance – which refers to procedures, rules, and regulations governing businesses. Understanding how the debate between the president and CEO relates to other aspects of governance will allow you to accurately gauge a business’s size.