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Celebrating Black History

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25e anniversaire de l'élection de Nelson Mandela

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I am a Language Facilitator/Translator. I like technology and teaching. Happy to join this class.

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VP I.T & Security

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Building Manager

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VP Product

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VP Engineering

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VP Social

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Advisor

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Todd Sanders: Senator McCain kept the economic engines running

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Assistant

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GB

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histoire moussa et firaouna  فارون  موسى

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Managing Director & CEO

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The Difference Between CEO, President & Managing Director

People are often confused about the differences between the CEO and the president of a company. Add in the title of managing director and the confusion multiplies. In small businesses in particular, many owners assume multiple roles since they're ultimately responsible for the company's success anyway. But if you're an owner considering which title to take, there are distinct differences between the job functions of the roles.

CEO: The Big Boss

The chief executive officer (CEO) is the Top Dog, the Head Honcho, the Number One in command. No one is higher up in the company than the CEO. As the one at the top, the CEO sets the vision and mission for the company. He's the one with the big, strategic plan who sees far into the future.

In a small business, the CEO is probably the owner, too. If so, the CEO knows better than anyone why the company was founded, its big reason for being and what the strategic goals are for the long term. The CEO informs and confers with the board of directors, if the company has one. But unlike nonprofit organizations, where the CEO is hired by and answers to the board, the CEO of a small business is more likely to use the board of directors as advisers, each with a different expertise. Sometimes the CEO is also chairman of the board of directors.

President: Second in Command

When a business has both a CEO and a president, the president is always second in the chain of leadership. The CEO usually chooses the president or, if someone else is responsible for culling candidates, the CEO interviews them and has the final say in who gets the job. The CEO and president will work closely together, so they must have a good working relationship and respect each other's abilities.

The president oversees day-to-day business functions. He understands the company's vision and mission as defined by the CEO, and it's his job to determine how these will be accomplished. He typically sets interim goals to meet at specific intervals, and relays these goals to the vice presidents or managers who are tasked with planning how they will direct their staff to meet these goals in their areas.

One Title or Two?

One combined title. Many small business owners feel that having both a CEO and a president would be too many bosses at the top for the size of their company. Instead, they have one person who serves as both the CEO and the president of the company. If the owner is directly involved with the business, he would likely take this top role.

This person's official title would be, "Sandra Smith, President and CEO." Either job title can be listed first. The point is to make clear that Smith fills both roles. This means she sets the vision and mission, plus handles the day-to-day operations of the company.

Two owners, two titles. If the business is owned by more than one person, the titles become more complicated. The one who has the most company shares, or who invested the most money in the company, could be the CEO. Or the co-owners might decide that one is more of a long-range thinker while the other is better working with people hands-on, so the former becomes the CEO and the latter is the president.

CEO only. Some owners feel that "President and CEO" sounds a bit too pompous for their small company and want to choose one title or the other, but not both. In that case, CEO is the appropriate choice. If you choose president instead, others outside the company may wonder, then, who the CEO is - the person who will give final approval on any deals.

What is a Managing Director?

The title of managing director is sometimes used instead of the CEO title. This is primarily a British title used in lieu of CEO, however, and one that would be confusing in the U.S. The word "managing" sounds hands-on, as if the one with this title would be handling day-to-day operations. Since that's not the role of a U.S. CEO, the title of managing director would likely be misunderstood.

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The Difference Between CEO, President & Managing Director

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CEO? President? Managing director? Fortunately, there's no rule that a small business must use all these titles. Some small business owners assume the dual role of CEO/president. Others opt to just be CEO. Managing director is a British title that doesn't translate to U.S. firms.