CEO vs President: Everything You Need to Know
Understanding a CEO vs President is important before a business owner chooses which title to assume for their company.3 min read
Definition of an Owner
Understanding a CEO vs President is important before a business owner chooses which title to assume for their company. The owner of a small company often handles a large variety of business tasks, with responsibilities ranging from complex tasks, such as reading over contracts, down to more basic responsibilities, such as taking out the trash at the end of the day. If the owner wants their company to be successful, they must be committed and willing to go above and beyond.
The owner of the company is based on who has equity in the business, and may be a single owner, or in the case of multiple owners, considered a co-owner. Be careful not to confuse an owner or co-owner with an investor. An investor may receive a portion or percentage of profits, but does not have an overall share in the company. A more formal role for the top person at a company is a CEO or president. An owner may choose to use one of these more formal names, and may also include "Founder" in their title.
Definition of a President
The president of a company is sometimes the top or most senior person who presides over the business. If the organization also has a CEO, the president is the second in command, after the CEO.
A president's responsibilities may differ depending on the type of business or the size of the business. They are typically responsible for logistics and business operations and confirming the company's policies are implemented effectively.
Some of the common roles for a president include:
- Guiding and leading managers
- Implementing the company strategy
- Providing recommendations to the board of directors
- Reporting feedback to the board of directors
- Handling budgeting and finances
Definition of a CEO
A CEO, which stands for Chief Executive Officer, is the highest-level person at the company. Some of the most common CEO roles include the following:
- Growing the value of the company
- Providing the final decision for high-level business changes
- Deciding the overall business strategy
- Advising the board of directors
- Overseeing future planning for operations
Another name for a CEO is an executive director, which is a title commonly used with non-profit organizations. The chairman of the board may sometimes take the role of CEO, but this is typical only if the person is heavily involved in the business.
Key Differences Between a CEO and a President
One of the key differences between the roles are the business responsibilities. The president is responsible for strategy and operations management, whereas the CEO is tasked with deciding and pursuing the company mission, vision, and strategy, as well as maintaining the financial success of the business.
Another main difference between the two roles are the level of hierarchy. When both a CEO and president role exist within a single company, the CEO outranks the president. This means the CEO is the top person, and the president is the second-highest ranked person.
There is also a difference in the perspective needed for each of the roles. Typically, the CEO is expected to focus on the long-term goals and strategy of the business. This includes the strategy, mission, vision, long-term goals, and future forecast for a number of years. On the other hand, the president is tasked with the shorter-term perspective, including the standard operations of the business and the logistical details.
There are many more differences between the role of CEO and president. Some include the following:
- The CEO works toward the maximization of wealth, compared to the president's focus on increasing profits.
- The CEO is responsible for planning, as opposed to the president's responsibility for implementation.
- The CEO works to gain effectiveness, whereas the president seeks efficiency.
- The CEO creates the vision for new strategies, such as technological advances, and the president is then responsible for putting those changes into place for the company.
- The CEO typically has the power to make final decisions for the company, whereas the president is making decisions about the people at the company.
Although these responsibilities are generally standard, some businesses may choose to spread out their responsibilities a bit differently.
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