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.
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.
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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.
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).
Comparison Table
| 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.
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.
The CEO of a company acts as the representative of the particular company through press conferences, professional organizations, and community interactions.
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).
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.
Main Differences Between CEO and Chairman
- 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.
- 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.
- http://www.financialdecisionsonline.org/archive/pdffiles/v10n1/sridharan.pdf
- https://link.springer.com/article/10.1007/BF02755984
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
