Difference between Owner, CEO and President
18/04/17 Difference between Owner, CEO and President
Many times there’s confusion about the job titles of owner, chief executive officer and president. Let’s look at these definitions. Then we’ll provide a list of useful terms and expressions.
In most cases today, a company’s owner is identified as such when the company is relatively small. If the company is big enough to have an executive hierarchy, the owner is the ultimate authority.
The CEO reports to, and often chairs, the company’s board of directors. Where an owner is a doer, a CEO is a planner who makes strategic decisions, such as the products to focus on and the markets to pursue. For the myriad details of running a business, though, a CEO must be a delegator who surrounds herself with people who are better at their jobs than she could be and then lets them do those jobs. In addition, the CEO molds the company’s culture to fit the board’s vision. This includes the creation of a succinct mission statement.
A company’s president is concerned with the day-to-day functioning of the organization. A president takes the visions articulated by the owner or CEO and implements them, sometimes by changing departments’ activities as necessary. The president generally is responsible for developing the policies, practices and procedures that govern the company’s routine operations, usually in conjunction with subordinate executives and managers. A president also will be closely involved with the company’s financial management in terms of monitoring the operating budget and planning for future capital and operating expenditures. When there is no CEO, the president is the highest executive within the company.
When organizations have both a CEO and a president, the CEO is generally the highest authority within the executive hierarchy. The CEO is responsible to the board of directors, which in turn is responsible to shareholders. The president is the CEO’s second in command. When organizations have two top leaders like this, it’s critical that there is a clearly-defined division of labor between the two. If the company has subsidiaries, it’s convenient for one executive to oversee their activities while the other directs the operations of the parent company.