Large corporations and small family-run businesses may seem worlds apart. However, they do share a common thread: their destinies hinge on the person atop the hierarchy. Depending on the business’ size and structure, this individual can either be the Chief Executive Officer (CEO) or the owner of a company.
A common misconception is that these two hats are similar and interchangeable. In a nutshell, the CEO oversees the entire company’s management, whereas the owner holds exclusive ownership rights over the business.
In this guide, we will go over the differences and similarities of the two roles, and how they work together for the company’s success.
What is a Chief Executive Officer (CEO)?
As the highest-ranking executive, the CEO is in charge of running the entire company — from the day-to-day operations to legal responsibilities. CEOs are often hired by large organizations, so they typically answer to the board and shareholders. Also, they get guidance from the company’s board and must abide by the visions and goals — even as a top executive.
What does the CEO do?
Generally speaking, the CEO is often responsible for driving profitability and expanding the company. Their role, however, varies from one company to another. This may depend on the company’s structure, size, and culture. Their primary responsibilities include:
- Creating and setting the company’s vision and mission — This entails setting a clear vision and mission, which also aligns with the company’s values and long-term objections.
- Leading the development and execution of business strategy — This involves making decisions about risk mitigation, potential new markets or growth opportunities, and even new product lines.
- Representing the company to all stakeholders — The CEO is the face of the company in front of the community, regulators, media, customers, and even its employees. This also requires them to maintain transparent communication and engagement with all stakeholders.
- Overseeing the entire operation of all divisions — This includes any fiscal activities, legal and ethical compliance, research and development, HR functions, marketing activities, and day-to-day operations.
Developing operational policies and procedures — This is about creating guidelines and protocols governing the company’s entire operation. They establish clear frameworks for organizational processes, employee conduct, and so on. - Evaluating potential partnerships, acquisitions, or mergers — CEOs also assess the strategic fit of potential partnerships, acquisitions, or mergers with other companies. When making decisions, they analyze factors like synergy opportunities or market positioning.
Other responsibilities of the CEO include:
- Working closely with other executives, such as the CFO, COO, or chief information officer
- Monitoring employee recruitment and retention
- Fostering a culture of innovation and creativity among employees
- Overseeing environmental and social responsibility programs
Qualifications for a CEO
In most cases, CEOs take the course that is closely relevant to the industry they want to work in. A 2022 study by Preply found that 34.6% of the top 1,000 CEOs in the Forbes list have a master’s or doctorate degree, and 22.3% have an MBA. Another study shows that 74% of CEOs in Europe and 52% in North America have a master’s degree. These studies suggest that obtaining post-graduate courses can be critical to quickly moving up to the CEO role. Still, having an MBA may not be mandatory for all.
Besides academic qualifications, CEOs also have extensive work experience — usually starting from entry-level roles to senior management roles. They are also well-versed in various business concepts, particularly administration, financial management, and economics.
And since a CEO serves as a company leader, they should possess the relevant skills such as:
- Leadership that guides and motivates diverse teams,
- Strategic thinking that can formulate effective strategies and adapt to evolving market trends,
- Financial acumen that involves fiscal management and budgeting to ensure good financial health for the company,
- Decision-making even under pressure, involving data analysis up to risk assessment, and
- Negotiation skills for working out deals and contracts with vendors or clients.
CEO vs other C-suite executives
C-suite or C-level executives are individuals holding high-ranking positions within a company, and are usually heads of specific departments. Here’s an overview of how the CEO differs from other C-suite executives.
| Aspect | CEO (Chief Executive Officer) | President | COO (Chief Operating Officer) | Chair of the Board |
|---|---|---|---|---|
| Scope of Authority | Highest executive authority, overseeing entire organization. | High executive authority, often overseeing multiple departments or divisions. | High executive authority, often overseeing operations, production, and delivery. | Moderate executive authority, leading board meetings and ensuring board effectiveness. |
| Decision-Making | Makes pivotal strategic decisions, sets organizational direction | Involved in strategic and operational decisions | Involved in operational and strategic decisions related to operations | Guides board discussions and decisions, provides vision and leadership |
| Reporting Structure | Reports to the Board of Directors, accountable to shareholders | Reports to the CEO or Board of Directors | Reports to the CEO | Reports to shareholders and leads shareholder meetings |
| Responsibilities | Overall strategic leadership, financial management, stakeholder communication, and vision setting | Strategic planning and high-level decision-making, and organizational strategy | Operational and strategic leadership within specific areas of the organization | Leading board meetings, ensuring board decisions align with company goals |
| Focus | Long-term strategy and organizational growth | Broader organizational goals | Operational and production efficiency | Board cohesion and effective governance |
Who is the owner of the business?
An owner is the entrepreneurial visionary behind a business. They are the ones who initiate its creation — planning to profitability. They can also be sole proprietors or co-owners with business partners. Initially, owners fulfill roles akin to CFO, CIO, COO, and more, wearing multiple hats. They might also appoint other executives and delegate responsibilities, as business expands. But unlike CEOs in public companies, the owner of a company remains autonomous and typically answers to a smaller group of executives, if any.
What does the company owner do?
In the most basic sense, the owner is the one responsible for building the company. They are often called the captain of the business since they decide on the best path to upscale or expand. Among the responsibilities of the company owner are:
- Creating the business plans — This involves formulating the blueprint to kick off the business, from the strategies, objectives, operational guidelines, and market positioning, which are all vital for sustainable growth.
- Monitoring finances and accounting — Owners are also the ones who oversee the company’s financial aspects. They typically scrutinize budgets, cash flow, or expense records.
- Making investment decisions — Deciding on huge investments in areas like technology, infrastructure, or market expansion falls under the purview of owners. They also assess the risks and opportunities that come with every investment decision.
- Ensuring legal and regulatory compliance — Every company owner knows the importance of complying with specific laws and standards for good governance. These can include GDPR guidelines (or the Data Protection Act), industry-specific regulations, and general finance laws.
- Demonstrating entrepreneurial leadership — Owners are also expected to embody an entrepreneurial spirit that can steer the business towards uncharted territories. May it be exploring new opportunities or driving innovation, a company owner always prioritizes fostering growth and adaptability.
Other responsibilities of the company owner include:
- Providing the resources that the employees and operations require
- Delegate responsibilities to the right individuals or teams
- Determining and implementing the company values
- Overseeing all business functions and performance of departments
- Establishing relationships with prospective partners, suppliers, and vendors
Owner vs Founder
The owner of a company and the founder are both pivotal roles in a company. Owners can be founders, but not all owners are necessarily the original creators of the business. Founders are called the driving force behind a business’ inception.
In terms of involvement, the owner focuses on the business’s overall management and profitability. The founder, on the other hand, has a more intimate involvement during the startup phase — such as product development and market entry.
Furthermore, the business owner often guides the business through different phases, from startup to expansion). The founder might transition to advisory roles as the business matures. In short, an owner is the one who acquires or establishes the business, while the founder is the visionary behind its conception.
CEO vs Owner: A Comparison of Responsibilities
What’s the difference between a CEO and an owner? Who is higher: CEO or owner? These are common questions when it comes to the CEO vs owner subject.
In some cases, the CEO may also be the owner — yet the owner doesn’t always have to serve as the CEO. To better understand their differences, here’s a comparison of their roles and responsibilities.
| Aspect | CEO (Chief Executive Officer) | President |
|---|---|---|
| Hierarchy | Occupies the top management position within the corporate structure | Holds the highest position, often as the founder or primary investor |
| Decision-Making Authority | Makes critical decisions on company strategy, operations, and investments | Holds ultimate decision-making power, dictating all major business directions |
| Accountability | Answerable to the Board of Directors, shareholders, and regulatory bodies | Directly accountable to themselves, stakeholders, and legal and tax authorities |
| Involvement in Operations | Oversee day-to-day operations, delegate tasks, and focus on strategic goals | Can choose to be hands-on in daily operations or delegate tasks to managers |
| Rewards | Receives a salary, bonuses, and potentially stock options or equity grants | Earns profits directly from the business, including dividends and sale proceeds |
| Risks | Bears professional responsibility and financial risk tied to company shares | Bears the highest financial risk, including personal assets and investments |
Frequently Asked Questions About CEO and Owner
Check out these FAQs to have a better understanding of the roles of the CEO and owner.
Is CEO the owner of the company?
In some cases, but not necessarily. CEOs are typically employees hired to manage the company on behalf of the owner.
What is the typical ownership structure in publicly traded companies?
In publicly traded companies, ownership is often dispersed among the shareholders. The ownership structure is characterized by a diverse range of individual and institutional investors. Each holds varying amounts of shares and contributes to the broad ownership base of the company.
Do owners always have a say in the company’s operations?
Owners usually have influence, but its extent may vary depending on ownership stake and company policies. Generally, the owner’s influence decreases as the company expands, which in turn limits their impact on operational decisions.
What happens when the CEO and owner disagree on a major decision?
Resolution methods for such vary. The CEO and owner may choose to resolve this through board discussions or legal arbitration. Decisions may also align with the majority shareholder’s perspective.
How do CEOs and owners collaborate for the company’s success?
Owners provide resources, while CEOs make strategic decisions for mutual success. They typically collaborate through open communication, regular strategy meetings, and performance reviews.
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Jielynne is a Content Marketing Writer at Convene. With over six years of professional writing experience, she has worked with several SEO and digital marketing agencies, both local and international. She strives in crafting clear marketing copies and creative content for various platforms of Convene, such as the website and social media. Jielynne displays a decided lack of knowledge about calculus, but proudly aces in literary arts and content marketing.
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