CEO or President: Choosing Corporate Titles

titles, CEO, president, Naperville business lawyer“What’s in a name? That which we call a rose; by any other name would smell as sweet.” These words of William Shakespeare from Romeo and Juliet, despite being more than 400 years old, may still ring very true for small business owners. Corporate titles can be confusing but can be an important part of a company’s professional image, especially if the company is looking to grow and attract investors. In my practice, I am regularly asked about the differences in the various titles and I hope I can offer a little bit of guidance for those who need it.

Corporate Titles

The various roles described by certain titles are often more applicable to officers of larger corporations than to small businesses. However, many smaller companies choose to model themselves, to a degree, on large corporations, and have assimilated much of corporate culture into their everyday practices. Such is generally the case with corporate titles. In smaller companies, though, one person may assume several titles, and as the company grows, those titles and responsibilities may be separated and distributed.

Owner

Unlike most large corporate structures, small businesses are often held by a limited number of owners, if not just one. They generally do not have shareholders or a board of directors, and the direction of the company is typically decided by a few people with financial interest. As an owner, especially a sole owner, you maintain control of the business and make decisions regarding its future.

CEO vs. President

Many corporations employ both a chief executive officer (CEO) and a president. While the specifics of each role depend entirely on the company’s corporate culture and business model, conventionally, each is assumed to have certain general responsibilities. The CEO, for most large companies, sits at the top of the executive hierarchy and is responsible for implementing the decisions of the company’s board of directors. In many businesses, the CEO is not only on the board of directors, but serves as the chairman of the board.

A president, on the other hand, is tasked with running the day-to-day operations of the company. In many companies, the president may be designated the chief operating officer (COO), and is responsible for executing the vision of the CEO within the business. Presidents may be responsible for the entire spectrum of a company’s operation or just a subsidiary part, depending on the company’s structure. Less complex companies, despite their large size, may elect to combine roles of CEO and president, as many of their designated responsibilities may be similar.

Planning Your Business

There are no legal requirements for naming a president or CEO for your small business, and it is very likely, that as you get started, you will probably fill both roles and more. However, planning for the future is very important and preparing to separate the titles at some point down the road can help ready your company for strategic growth. At the Gierach Law Firm, we have helped hundreds of business owners develop sustainable, long-term business plans that have facilitated a great deal of corporate success. If you are ready to take the next step in secure your company’s future, contact an experienced Naperville business planning attorney today.