BUSINESS LEADERSHIP: CEO Vs President — Knowing The Difference

02 Jul, 2024

Did you know that in many companies, the CEO is the leader, and the president is the second in command, and that for smaller companies (or those without subsidiaries), the CEO and president roles are often carried out by the same person?

The chief executive officer (CEO) is the highest-ranking executive at any given company, and their main responsibilities include managing the operations and resources of a company, making major corporate decisions, being the main liaison between the board of directors and corporate operations, and being the public face of the company. CEOs often have a position on the board and are sometimes the chair. Other titles for CEO include managing director and sometimes even president

The board of directors is elected by the shareholders of a company and is usually composed of both inside directors, who are senior officers of the company, and outside directors, who are individuals not employed by the company. The board establishes corporate management policies and decides on big-picture corporate issues. Because the board is in charge of executive functions, and the CEO is responsible for integrating company policy into day-to-day operations, the CEO often fills the role of chairperson of the board.

Another factor that determines the positions of company officers is its corporate structure. For example, in a corporation with many different businesses (a conglomerate), there may be one CEO who oversees a number of presidents, each running a different business of the conglomerate and reporting to the same CEO. In a company with subsidiaries, it would be unusual to have one person carry out the roles of both CEO and president, although it does happen at times, often with smaller businesses. In such instances, the small business is often owned by the same person who is also the CEO and president.

In some corporations and organizations, the president is the leader of the company's executive group. In the corporate world, however, the president often refers to someone who is the leader of a segment or critical part of the overall company, rather than the leader of the overall company.

In some instances, the president is also the CEO. In small businesses, the president might also be the owner of the company. In an organization or company where a CEO is already in charge, the president is the second in command. In the corporate world, presidents often hold the position of chief operating officer (COO) responsible for day-to-day operations, and has vice presidents for different parts of the company reporting to them.

Is CEO Higher Than President? Yes, in general, a CEO role is higher than that of the president of a company. The CEO is the highest-ranking officer while a president is the second-highest ranked officer. Depending on the company, however, there may be differences between how the roles are handled and the same person may also hold both CEO and president positions.

While a CEO is tasked with carrying out a company's mission statement, managing its overall strategy, and ensuring its strong financial performance, a president is primarily responsible for the operational management of a company. However, a CEO is hired and fired by the board of directors of a company, thus giving the chairman of the board power over the CEO. If a board feels that a CEO is not performing at acceptable levels, they can fire the CEO and replace them with a new one.

In general, the CEO is considered the highest-ranking officer in a company, while the president is second in charge; however, in corporate governance and structure, several permutations can take shape, so the roles of both CEO and president may be different depending on the company.

Image Credit: keydifferences

Source: Investopedia

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