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Position Hierarchy: Is a Company’s CEO, President or Chairman Ranked Highest?

lawtrades workplace hierarchy

Although a Chief Executive Officer is technically the highest ranked individual within a corporation, the top three potential positions available within a company are all uniquely powerful in their own ways. Within some companies, two or more of these titles may be occupied by the same person, two may be merged or all three may remain independent. When independently functioning, these positions often serve as checks and balances upon the other one or two.

 

The Role of a Company’s Chief Executive Officer

A Chief Executive Officer is primarily responsible for a company’s success and may ultimately be held accountable in many ways for decisions made at the highest levels. Although a single individual may serve as both CEO and Chairman of the Board, these roles are usually independent and function as a check and balance upon the other. Similarly, the title of CEO and company president may by synonymous, but there are instances in which these roles function independently as well.

As a company’s “ultimate authority,” a CEO is held accountable by reporting directly to the Board of Directors. In terms of legal duty, a CEO is bound to make short-term and long-term strategic decisions in the best interests of the company while upholding the ultimate goal of increasing the value of the company’s shares. In addition, the CEO serves as the most authoritative communicator within a company. Practically speaking, this means that when a CEO speaks to the larger business, the public, shareholders and government officials, the information and opinions that he or she conveys carries significant weight. More than anyone else, a CEO is responsible for ensuring that a company’s mission and overall vision are realized.

 

The Role of a Company’s President

When a single individual does not simultaneously hold the positions of CEO and president, a company president generally serves as the Chief Operating Officer. The company’s vice presidents of different departments and/or divisions report to the COO, who is ultimately held responsible for the business’s daily operations. Like a CEO, a COO reports to the Board. And like both a CEO and Chairman, it is the Board that holds a COO accountable in the event that a problem arises.

 

The Role of a Company’s Chairman

A company’s chairman serves primarily as the head of its Board of Directors. In this capacity, a chairman is responsible for a variety of leadership tasks, including serving as chief communicator on the Board’s behalf, ensuring that Directors are appropriately informed about urgent matters affecting the business and acting as a liaison between broader company management and the Board.
Although in some companies the roles of chairman and CEO are combined, most often these roles are exercised independently. When independent, a chairman is tasked with providing a CEO independent counsel regarding company business and helps the company’s CEO with setting agendas for Board of Directors meetings. When these meeting occur, the chairman leads them. As the Board serves to advocate on behalf of a corporation’s shareholders, it is the chairman’s job to serve their interests and seek consensus for Board-related decisions. It is ideal for the CEO and chairman positions to remain independent, as these positions often serve a “check and balance” function in respect to the other.

 

Answers to Additional Questions

If you have questions about corporate structure, business management or compliance or you wish to recruit top talent for your company, please consider reaching out to us today. In addition, we provide reputable staffing and recruitment services in order to meet the needs of virtually any company.