CEO vs. President: An Overview
In general, the chief executive officer (CEO) is considered the highest ranking officer in a company, and the president is second in charge. However, in corporate governance and structure, many permutations can take place, so the roles of both CEO and president may be different, depending on the company.
A chief executive officer is the highest ranked 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 chairman of the board.
Another factor that determines the positions of company officers is 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). The COO, responsible for day-to-day operations, has vice presidents for different parts of the company reporting to him or her.
Generally, the board of directors sets the policy, the president executes the policy and reports back to the board, then the board reports back to the shareholders, the ultimate owners.
While unusual, a company without subsidiaries may have one person execute the roles of CEO and president, and perhaps even chairman. As such, greater communication and contact can be achieved between the board of directors that sets policies and the president who oversees the day-to-day operations. For example, Shantanu Narayen, Jeff Bezos, and David S. Taylor carry the title of both president and CEO at Adobe Systems (ADBE), Amazon.com, Inc. (AMZN), and Procter & Gamble Co. (PG), respectively. Bezos is also the founder of Amazon.com.
These are examples of general scenarios. The CEO is not always the chairman of the board, and the president is not always the COO. Whatever the arrangement, the ultimate goal in corporate governance is to effectively manage the relationship between owners and decision-makers and increase shareholder value.
- At many companies, the CEO is the leader and the president is the second in command.
- Often the CEO and president carry out different duties, and the roles are performed by two people.
- At smaller companies or those without subsidiaries, the CEO and president roles are often carried out by the same person.