A company of any size has various roles and positions within it, each helping to drive the business forward. At the top is the chief executive officer (CEO) and president – two key positions responsible for direction, decision-making, and daily operations.
Typically, when referring to a corporate structure of a business, the CEO holds the highest-ranking role, with the president second in command. But this leadership structure may vary according to the size of the company, as well its needs, strategies, and overall goals. The specifics of each position’s responsibilities hinge on the needs of the business.
CEOs and Their Responsibilities
CEOs, in general, hold the highest position within a company. They’re part of the C-suite of executives, which might also include the chief operating officer (COO), the chief financial officer (CFO), and chief technology officer (CTO). But not all companies fill all C-suite roles; these positions tend to be more common in the corporate world than in small, private businesses. In some cases, a company’s CEO will also be the president.
Positioned at the top of the C-suite, CEOs have a great deal of responsibility. They typically set long-term strategy goals and act as the business’s key decision-maker, asking questions like:
- What does the business need for success?
- What does the big picture look like?
- How can we increase the value of the business?
CEOs tend to be concerned with increasing revenue and stock value and may focus their efforts on finding ways to expand the business or make strategic acquisitions that align with the company’s future goals.
While the CEO manages the overall direction of the company, the president focuses on the day-to-day operations.
Despite being the top executive, the CEO has many people to answer to – particularly if they run a publicly traded company. In a public company, the CEO is elected by a company’s board of directors and serves as the main point of contact between the board and the business. Since the board of directors oversees company activities and keeps shareholder interest top-of-mind, the CEO will need to consider the board’s advice and act on it occasionally. Private companies – unlike public ones – aren’t legally required to have a board, but they can choose to select a board of directors to help guide decisions.
A CEO might also have a seat at the board table, but this is sometimes seen as a conflict of interest. Some boards prefer that the CEO remain independent and focused on their position.
The CEO is also the public face of the business. For example, the CEO is at the forefront of quarterly earnings calls, in which public companies must participate. During these calls, the CEO keeps investors updated on key areas of the business – how much their business grew (or didn’t), the direction it’s heading, and any notable products and initiatives the company is currently working on. They’re also expected to answer any questions investors may have. Members of the press also attend these calls to publicly report on the state of the business.
Company Presidents and Their Responsibilities
While the CEO manages the overall direction of the company, the president focuses on the day-to-day operations. In companies with both a CEO and a president, the president reports to the CEO and is typically second in command. In such a case, the president’s role varies from that of the CEO, particularly in the sense that they’re generally less focused on long-term strategy and more focused on daily operations. While internal eyes may be on the president, in terms of how they’re leading the business, their responsibilities aren’t nearly as public-facing as a CEO’s. Additionally, the president doesn't typically work in close liaison with the company’s board of directors.
Depending on the size of a company, the highest ranked role may be a president, not a CEO. A small, private business, for example, might have the president sit at the top, with no CEO or C-suite. Private companies often don’t have a board of directors to answer to, nor any earnings calls to report. While their position may be less public-facing than others, the president of a small business still focuses on day-to-day operations – but they might have the added responsibility of considering what long-term strategies will further bolster their business.
The role of president – particularly its name – has seen a bit of evolution, at least in recent years. Within some companies, there may not be a traditional “president” role; instead, there might be a COO whose sole responsibilities focus on day-to-day operations. Depending on the size of the company, instead of a president role, there may be a suite of vice presidents (VPs) in charge of various departments – there may be a VP of marketing or a VP of finance, for instance. Each VP would likely report to the CEO, but ultimately would be responsible for their respective divisions.
Is It Better to Be CEO or President?
Every company’s structure is different. Many small businesses don’t need a robust upper management team to drive business growth and handle day-to-day operations. In fact, when looking at small businesses, it’s pretty normal for the CEO to wear multiple hats – acting not only as the head decision-maker, but also as the company’s president who focuses on daily day-to-day operations. At times, a small-business CEO also handles the business’s finances versus having a CFO.
Essentially, management structure depends on the company – namely, its size and its needs. Small, private businesses have more flexibility in deciding the concrete roles within the company, right down to whether they want to use the title CEO or president, or even a title such as president/founder or president/owner.
But as a company grows, the president might want to add additional roles within the business – perhaps a CEO to focus on long-term strategies, allowing the president to continue to focus on day-to-day responsibilities or a CFO to take over finances. Then, with fewer hats to wear, the president can streamline their own role to fit the company’s goals.
The Takeaway
Depending on the company and its size, a business may have a CEO, a president, or both. In companies with both, CEOs tend to focus on long-term, big-picture goals. They’re the key decision-makers and are usually concerned with ways to increase revenue and, if public, shareholder value. Meanwhile, the president focuses more on day-to-day business operations and reports to the CEO. Smaller, private companies, on the other hand, might have just one person wearing both hats – CEO and president.
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