CEO vs President – Difference and Comparison | Diffen
In corporate management structures, the CEO is the highest ranking officer and visionary, while the president is more responsible for day-to-day management decisions and strategies. In simple terms, the CEO makes a promise to the company, setting a long-term vision. The president of the company keeps that promise and manages the company to make that vision a reality.
The Corporate Structure
While there are many different ways a corporate structure is set up, the basic corporation is headed by a board of directors. The CEO is the highest ranking officer with direct responsibility for the management of the company, and answers to a board of directors. Board members are elected by the shareholders, and may be either senior officers in the company or people independent of the company. The board is responsible for establishing corporate management policies and giving input on big-picture decisions. Quite often, but not always, the CEO also serves as chairman of the board of directors. The president is second in command after the CEO (or first in command if there is no CEO), and also usually fills the role of the Chief Operating Officer (COO).
Responsibilities
The CEO of a company is responsible for the overall strategy, vision, and financial well-being of a company. In a publicly traded company, the CEO often also acts as chairman of the board, as he/she is responsible for integrating the board’s decisions into the operations of the company. John Chambers, Chairman and CEO of networking giant Cisco, speaks on the roles of a CEO in this video:
The president is responsible for more of the hands-on implementation of corporate goals into the actual workforce. The president is also required to report back to the board on company activities (and then the board reports to shareholders). In smaller corporations, the CEO may also fill the role of president.
Other Roles
In addition to company-facing responsibilities, the CEO also often acts as the head salesman, and is responsible for making pitches to high-profile customers, making sales presentations, and announcing new products or services. The CEO is the public face of the company, and may interact with local communities through community events, chamber of commerce meetings, etc.
The president, in the quest to implement the vision and goals established by the board and CEO, must use effective metrics and measure the performance and efficiency of employees. Presidents also tend to play a larger role in human resources decisions, and managing detailed financials like travel reimbursements and company compliance with laws and regulations.
Power
Particularly in American corporations, CEOs are often extremely powerful and entrenched in their position. As a growing private company transitions to a corporate structure, it is common for the owner to taken on the role of CEO, play a large part in establishing a board of directors, and to establish him- or herself as chairman of the board. In the U.K. and much of Europe, codes of best practice strongly discourage this setup. CEOs usually have the power to make binding decisions for the company without prior approval from the board of directors, and CEOs may fire or hire for any position directly in the company.
Presidents, on the other hand, generally act more as top-tier managers with power over personnel, but lack the power to single-handedly alter the course of the company or manage other executive officers. This is, however, a generalization, and power dynamics vary among different corporations.
Examples
Presidential roles vary according to firms and corporate structures. Below are some examples of the roles in presidential titles of reputed firms:
- In 2007, Bear Stearns and Morgan Stanley had two presidents each, reporting to one CEO (who also happened to be chairman of the board). Warren Spector and Alan Schwartz presided at Bear, while Robert Scully and Zoe Cruz presided at Morgan. Each president was basically a co-COO overseeing half the firm’s business divisions, but there was no official title of COO.
- Lloyd E. Reuss was President of General Motors from 1990 to 1992. He was the right hand man of Chairman and CEO Robert C. Stempel, and became president on Stempel’s insistence that he be on named the company president. Stempel put him in charge of North American operations, but the board was not happy with this decision and showed their displeasure by not granting Reuss the title of COO.
- Michael Capellas was appointed President of Hewlett-Packard for a smooth transition into its acquisition and integration of Compaq, where Capellas used to be the Chairman and CEO. Capellas served only six months as president. After his departure, his former role of president was remained unfilled, since the executives who reported to him started reporting directly to the CEO.