There is always a CEO and a director in every company. But what makes a CEO different from a director? Can the same person take on both roles?
A lot of us might think that the CEO and the director are the same thing. Some people might even think that “CEO” is just another word for “president,” “director,” or “chief director.” But in reality, the CEO and the director are two different jobs with different roles and responsibilities.
Now, let’s get to the real question: what is the difference between CEO and director? Well, keep reading to find out the answer about CEO vs director!
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The Definition of CEO and Director
What is the difference between CEO and director in a Startup (source: freepik)
To gain a deeper understanding of the differences between CEO and director, we must first understand each job’s definition.
CEO is short for Chief Executive Officer. The title is often mistaken for president director or chief director, while the two roles have different functions.
CEO in big corporation mostly focuses on high-level strategic decision-making. The CEO’s decision will highly impact the company’s growth.
For instance, the CEO is the one who creates the company’s strategy, builds the company’s organization, and develops the work culture. All these decisions will directly impact the team or the employee and their performance.
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CEOs also play a role in pushing the team to achieve success. They have to motivate the team to stay on track and reach their goals which are also the company’s goals.
At a glance, the CEO’s job looks like an endless meeting. However, those meetings are crucial; through those meetings, the CEO can oversee and ensure that everything goes according to plan. From the company’s division report, the CEO can assess the performance and decide which aspects to focus on and improve.
For CEOs in smaller companies, the role might differ slightly from those in big corporations. In smaller companies, including startups, the CEO may be directly involved in the company’s day-to-day operations.
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Due to the lack of proper personnel to push the company to its goals, many existing employees have to deal with multiple roles, including the CEO.
In short, the CEO’s role is mostly on strategic decision-making, and they may not be directly involved with the employee or company’s day-to-day operations.
In contrast, the director’s job is very close to the day-to-day operations, and they deal with the employee daily. Director takes direct orders from the CEO.
The CEO is the conceiver, while the director is the executor. Director is also the one who reports to the company’s stakeholders.
Often in Indonesia, we see that the CEO and director title is given to the same person. Sometimes, they even mean the same thing.
For instance, in conventional companies, the head of the company is called the director, while in startups, they use the CEO title. After all, the company has their title and hierarchal system.
If a company has a CEO and a director, the CEO is higher on the company’s hierarchal structure than the director. Multiple people across divisions commonly hold the director title, such as the operational director, the marketing director, etc. Together, they are called the board of directors.
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The Role of CEO and Director in A Startup Company
The Difference Between CEO and Director in A Startup (source: freepik)
Now that we know what a CEO and a director are, you may be able to see how they are different from each other. But to get a better idea, let’s look more closely at what each title means and what it means to do.
CEO’s Role
- – Running the business
- – Creating and carrying out the company’s vision, mission, and goals
- – Working on the company’s strategic plan
- – Telling the board of directors what to do
- – Looking for opportunities to work with other companies.
- – Acting as the company’s face to the public and making sure good impressions are made
- – Making connections with other CEOs to improve the company’s reputation and credibility
- – Creating a good environment to build a strong team
- – Making the company’s annual budget plan
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Director’s Role
- – Putting the company’s strategy into action
- – Making sure the company has a good culture
- – Managing the company’s budget
- – Helping the company’s managers do their jobs
- – Taking orders from the CEO and reporting back to the CEO
- – Taking responsibility for the company’s operation
- – Taking legal responsibility for the company’s stakeholders
- – Allocating the company’s current resources
- – Telling the company’s board of directors how to make things better
- – Hiring people and holding the final job interview as part of the hiring process
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From what we’ve said about what a CEO does and what a director does, we can now see how these two jobs are different. CEOs and directors are both important to the growth of a company, but they do different things and help each other out.
Most CEOs are not involved in the day-to-day running of the company. But some CEOs might get involved if they run a smaller company.
The directors, on the other hand, are in charge of running the company and making decisions like allocating the budget and keeping an eye on how things are done.
Most of the time, the director of a new business is called the Chief Operating Officer (COO). The COO is the second-most important person in the company, right after the CEO.
Usually, the CEO of a multinational company works at the headquarters, while the branches in each country are run by chief directors.
The director is in charge of running the business in these branches and reports to the CEO. Lastly, the CEO and the director make different amounts of money.
Most of the time, the CEO gets paid more than the directors. But a CEO’s salary range also varies a lot depending on the size of the company.
