A chairman and a CEO work hand-in-hand to make sure their business is moving in the right direction. Despite similarities in their short and long-term goals, these positions greatly differ in a number of ways.
|Duties include overseeing board meetings, maintaining a harmonic relationship between members of the board, evaluating the performance of high-ranking managers, and voting on strategic plans||Duties include studying market trends, analyzing company profiles, proposing tactical business plans to the board, executing board-approved business plans, and supervising the overall operations of the company|
|A part of the board of directors who is elected by other board members||Elected by the board, but not necessarily a part of the board of directors|
|Has no power to overrule decisions made by either the board or the CEO without the approval of the majority of the board||Has the power to overrule decisions made by lower-ranking executives|
|Acts as a part-time leader that guides other board members in overseeing the business as a whole||Plays an active role in the operational aspects of the business|
A chairman, also known as the chair of the board, is a top-level executive elected by other members of the board of directors. The chairman is mainly responsible for maintaining business sustainability and profitability.
Meanwhile, a CEO, which is short for “chief executive officer,” is a high-ranking executive responsible for making strategic and operational decisions that ensure business leverage.
Chairman vs CEO
Despite sharing the same goals for the company, there is a huge difference between a chairman and a CEO.
Duties and Responsibilities
While both are integral for attaining business success, a chairman and a CEO assume different roles. As the main head of the board, the chairman is mainly responsible for protecting the best interests of the company. The duties of the chairman include overseeing board meetings, maintaining a harmonic relationship between members of the board, evaluating the performance of high-ranking managers, and voting on strategic plans that are proposed by the CEO.
A CEO, on the other hand, plays a vital role in the strategic and operational aspect of a business. CEO’s are responsible for executing board-approved business plans and supervising the overall operations of the company. They also bridge the communication gap between corporate operations and the board. They study market trends, analyze company profiles for possible business partnerships, and propose tactical business plans to the board.
Both the chairman and the CEO are often members of the board and, in some cases, the same executive plays both roles. They are elected by other members of the board, but there is still a difference between them. A chairman is always part of the board and is considered a “peer” to other board members, while a CEO does not necessarily have to be seated in the board prior the election.
A chairman and a CEO are both high-level executives that have power and authority over other members of the company. A CEO can overrule disadvantageous decisions made by lower-ranking executives, while the board of directors, with the chairman as its head, can overrule the CEO when it comes to decision-making. However, the chairman alone does not have the authority over either the CEO or the board of directors since the chairman does not hold a managerial position over other board members.
Degree of Involvement
The degree of involvement of a chairman and a CEO depends on the size and the needs of the company. Typically, between the two, a CEO is more hands-on with the overall business operations. A chairman, by contrast, is usually a part-time leader whose main job is to lead and guide the board in overseeing the business as a whole. However, in times of crisis, the chairman works more closely with the CEO.