Difference Between CEO and Chairman (With Table)

The Chief Executive Officer (CEO) and the Chairman are both parts of the management team of every company. They have some similar responsibilities, and at times both the roles are fulfilled by a single person. Although both CEO and Chairman have some similar responsibilities and duties, they differ considerably in many ways. 

CEO vs Chairman 

The difference between CEO and Chairman is that the chairman of a corporation is comparatively more powerful than the CEO. A company’s Chairman has the authority to hire and fire its CEO (Chief Executive Officer). However, a CEO does not have the power to hire or fire the Chairman of a company. They only act as representatives or are typically the face of the company.    

The CEO (Chief Executive Officer) of a company is the typical face or representative of the company. They are the head of the executive team, and the entire executive team members are answerable to them. An organization’s CEO is primarily responsible for its overall success and serves as the top management. They are also responsible for strengthening the business results of the company.  

The Chairman of a company acts as the Head of the Board of Directors or the Head of Trustees. They exercise more authority and power in the company than the Chief Executive Officer (CEO). The Chairman is primarily responsible for handling the profitability and stability of a company and does not necessarily play an active role in everyday management. The Chairman, however, has the right to hire and fire upper-level managers like the CEO and President of the company. 

Comparison Table Between CEO and Chairman 

Parameters of Comparison   CEO  Chairman 
 Authority and power   Exercise less power and authority than the Chairman.   Exercise more power and authority than the CEO. 
 Hire and Fire  Does not have the authority to hire and fire the Chairman of the company.    Has the authority to hire and fire the CEO of the company. 
 Board of Directors  Accountable to the Board of Directors.   Has been elected by the Board of directors to act as the Head of the Board.  
 Position   Head of the executive team.  Elected to act as the Head of the Board of Directors or Trustees.  
 Daily Operation   Present and included in the daily operation of the company.   Does not necessarily play an active role in the everyday management of a company.  

What is CEO? 

The CEO (Chief Executive Officer) is the typical face or representative of a company. The CEO is in charge of the executive team, and all of its members report to him. The position of the CEO is one of the highest in the company. The CEO, however, exercises less authority and power than the Chairman of a company.  

An organization’s CEO is primarily responsible for its overall success and serves as the top management. The CEO takes the responsibility of making critical strategic decisions for the growth of the company. They work towards establishing and nurturing relationships with other companies to strengthen the business results.  

The CEO of a company acts as the representative of the particular company through press conferences, professional organizations, and community interactions. They also try to maintain a healthy work culture by effectively managing the executive team. The CEO is, thus, included in the day-to-day operations of a company. The CEO, however, is directly accountable to the Board of Directors for every action and strategy they make.  

What is Chairman? 

The Chairman of a company acts as the Head of the Board of Directors or the Head of Trustees. They exercise more authority and power in the company than the Chief Executive Officer (CEO). The Board of Directors elects the Chairman to preside over and serve as the Head of the Board.  

The company’s chairman is primarily responsible for setting agendas for board meetings based on the overall business goals. They also regularly evaluate the performances of high-level managers like the President or the CEO and make recommendations for improvements.  

The Chairman, however, does not necessarily play an active role in the everyday management of the company. They work outside the daily operations of a company. The Chairman takes the responsibility of defining long-term company goals in annual plans. They are responsible for hiring and firing a company’s upper-level managers like the CEO or the president. 

Main Differences Between CEO and Chairman 

  1. The CEO of a company has less authority and power than the Chairman of the company. On the other hand, the Chairman of a company exercises more authority and power than the CEO of the company. 
  2. The CEO of a company acts as the head of the executive team, whereas the Chairman of a company has been elected by the board of directors to act as the head of the board of directors. 
  3. The CEO of a company does not have the authority or power to hire or fire the Chairman of the company. On the other hand, the Chairman of a company exercises power to hire and fire the CEO of the company. 
  4. The CEO of a company is directly accountable to the board of directors for their actions, whereas the Chairman of a company has been elected to serve as the head of the board of directors or trustees. 
  5. The CEO is present and included in the daily operations of a company. On the other hand, the Chairman is not necessarily involved in the everyday management of the company. 

Conclusion

The Chief Executive Officer (CEO) and the Chairman are both parts of the management team of every company. They have some similar responsibilities, and at times both the roles are fulfilled by a single person. Although both CEO and Chairman have some similar responsibilities and duties, they differ considerably in many ways.  

The CEO (Chief Executive Officer) is the typical face or representative of a company. The CEO is in charge of the executive team, and all of its members report to him. The CEO of a company acts as the representative of the particular company through press conferences, professional organizations, and community interactions. They also try to maintain a healthy work culture by effectively managing the executive team.  

The Chairman of a company acts as the Head of the Board of Directors or the Head of Trustees. The Board of Directors elects the Chairman to preside over and serve as the Head of the Board. The company’s chairman is primarily responsible for setting agendas for board meetings based on the overall business goals. They also regularly evaluate the performances of high-level managers like the President or the CEO and make recommendations for improvements.  

The main difference between CEOs and Chairman is that they do not exercise the same power and authority in the company.  

References 

  1. http://www.financialdecisionsonline.org/archive/pdffiles/v10n1/sridharan.pdf 
  2. https://link.springer.com/article/10.1007/BF02755984 
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