CEO vs. PresidentWhat's the Difference?
Large companies and organizations have structures of hierarchy and these hierarchies play a key role in how the business runs.
Difference roles come with different responsibilities, and different decisions they’ll have to make.
Take a hotel company, for instance.
The CEO will make decisions that the housekeeping department won’t have any say in, but the CEO won’t be deciding which cleaning products are used in which situations.
Managers will make decisions for their departments. A housekeeper will report to the housekeeping manager.
A front desk clerk will report to the front desk manager, and so on and so forth.
The CEO is the highest ranking executive in a company, and the CEO reports to the board of directors.
Often, the CEO is also the head of the board of directors.
But what about the president in a company or organization? In this case, we’re not comparing the CEO of a company to the president of a country.
The role of president is part of the hierarchy of a business or organization.
Even sports teams have presidents, general managers, and so on.
Let’s break down the differences and the similarities between a CEO and a president, what each role is responsible for, where there’s overlap and what’s unique about each position.
Quick Facts About a Chief Executive Officer (CEO)
A CEO is responsible for determining the vision of an organization and the strategy necessary to execute that vision.
They’ll take information and suggestions from other c-suite executives and department heads and distill it into a uniform plan of action.
The CEO also acts as the public face of a company and when things go wrong, it’s their name that’s going to be in the news.
They report to shareholders and will often interact with the community on behalf of the business.
The CEO is the head executive in a company but they aren’t the only executive.
There are a handful of executives in a company, which are referred to as the “c-suite”.
Here are the other roles that exist in the c-suite of a typical corporate hierarchy.
- The Chief Operating Officer: The COO is often the 2nd in command behind the CEO, and often the COO is also the president or the vice-president of operations. The COO works in close tandem with the heads of the various departments and works to provide support to the day-to-day operations of the business.
- The Chief Financial Officer: This is the top financial role in a company. The CFO is responsible for cash flow, analyzing the financial needs of the business, and helping to come up with strategies in terms of ensuring the company’s financial success.
- The Chief Information Officer: The CIO is responsible for the company’s IT, processes, and people. In today’s world, there’s almost always an emphasis on technology associated with this role, but it includes information systems as well.
The CEO has certain legal responsibilities to the company’s shareholders, which are known as fiduciary duties.
There are three of these fiduciary duties, and they are the duty of care, the duty of loyalty, and the duty of disclosure.
Failure to adhere to these duties can result in severe consequences for the CEO and the company.
The CEO will often be the highest-paid member of the organization, but this isn’t always the case.
For instance, in a business that owns a professional sports team, some of the athletes will often earn the highest salaries.
The same is true in the entertainment industry, where top CEO’s of a film studio may earn tens of millions in salary but an actor can earn that in a single movie and can make multiple films a year.
In any case, as a general rule of thumb, it’s the CEO that earns the most in a business and has the most responsibility.
The buck stops at them when things go wrong since they’re the ones that have to go on the news or issue a press release to apologize, for example, if the company does something wrong or harmful.
Quick Facts About a President
The president of a company reports to the board of directors and to the CEO.
This is the role that’s directly below the CEO in the hierarchy of a business.
The president in a business oversees things like determining the budgets that are needed for each department.
This leads to department heads propositioning the president for higher budgets and trying to make the argument that their department needs the funds more than other departments.
The president is also responsible for staffing and managing the executives and heads of departments.
The president deals more with staff and ensuring that people are doing what needs to be done, whereas the CEO deals more with the business and the strategy of the business.
Both roles are crucial, since it’s the staff that are carrying out the strategies and plans that are determined by the CEO, and the president is there to empower those staff members.
The CEO comes up with the vision, and the president works with the employees to implement it.
The president isn’t necessarily an officer in the company, but if the president is a member of the c-suite then they will also have a fiduciary duty to the shareholders (owners) of the business, as outlined above for the CEO.
What’s The Difference Between a CEO and a President?
The following table will help to illustrate the differences and the similarities of a CEO vs president in a corporate structure.
|Rank||This is the second highest ranking position.||This is the highest ranking executive.|
|Functions include||Day to day operations of the business, managing finances, managing staff.||Big-picture vision and strategy along with certain aspects of the day to day.|
|Corporate duties||Report to the CEO and board, implement the strategies that the CEO assigns, determine policies.||Reports to shareholders, interacts with the public on behalf of the company, promotes the business as the public face.|
|Works below||The president reports to the board of directors and the CEO.||The CEO reports to the board of directors.|
|Subordinates||The c-suite, vice presidents, and the department heads/managers.||The c-suite, the president.|
|Other roles||The president may also be the COO in the c-suite.||A CEO may also act as president and chair of the board of directors.|
The amount of overlap between CEO and president will vary. It can depend on the size of the business, the experience and skills of the person filling the roles, the funding or budget that exists to hire high-level executives, if the CEO is also the owner, and more.
Sometimes, one person will fill the role of both president and CEO.
This is more common in smaller companies and is much more rare as the business becomes larger since it becomes more and more difficult, and less practical or effective, for one person to hold both roles.
Sometimes, there won’t be a CEO at all, in which case the president is the highest ranking employee.
CEO vs President: Which is More Important?
In terms of hierarchy, pay, and their role in the company, the CEO is the most important because without the vision at the top, it’s hard to get a business in sync.
Having said that, it’s the president that takes this vision and turns it into reality by working with the leaders of each department within the company.
The CEO is ranked higher, but you’ll be hard pressed to find a CEO who won’t admit that having an amazing president working below them is an essential part of success.
The president of an organization has a ton of direct hands-on influence over how well things are going to run, but at the end of the day, they’re working to implement the vision and strategy that has been determined and assigned by the CEO.
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University of the People "CEO vs President: Understanding the Different Influences" Page 1. September 22, 2022
Maryville University "What Does a CEO Do?" Page 1. September 22, 2022