The differences in the roles of Chairman and Chief Executive

The roles of Chairman and Chief Executive are essential to any company but unfortunately they can get confused. Lack of clarity can lead to all sorts of difficulties. Not only can it cause relationship problems between the non executive directors and the executives, it can lead to all sorts of problems that can have a direct effect on decision making and company performance.

The role of the CEO

The chief executive is responsible for running the business and carries full executive responsibility for the company’s success. Whilst not a full job description, a sample of a CEO’s responsibilities are below:

  • Defines the company’s strategy and business plan.
  • Communicates vision to staff and customers.
  • Defines and maintains the nature of the company’s management culture.
  • Leads the executive team in the implementation of all business programmes and initiatives.
  • Drives high level strategic and operational decisions.
  • Carries full and final responsibility for the company’s financial performance and delivery of such to the business plan that was agreed with investors.
  • Accounts for progress on business implementation and company financial performance to the collective board and implements board decisions.

Primary role of a chairman

The chairman of a company runs the affairs of the board. Here are some of the primary duties of a chairman to illustrate the difference between a CEO and Chairman.

  • Leads and runs the affairs of the Board
  • Sets the agendas for board meetings.
  • Chairs board meetings.
  • Holds the CEO and the executive directors to account for the implementation of the agreed business plan, the decisions of the board, and the financial performance of the company.
  • Supports the CEO and the executive team by offering them the benefit of experience and acts as a good mentor to the executives.
  • Co-ordinates board sub committees.
  • Handles the appointment and termination of the CEO.

Key differences between the roles of Chairman and CEO

  • The chairman is the boss of the board and leads the boards affairs whereas the CEO is the operational boss of the company. The Chairman should never assume any CEO responsibilities when attending the business or make any attempt to assume operational rank over the CEO regarding day to day operational matters.
  • The CEO works full-time in the management of the executive team and the running of the company’s operations.
  • The chairman mostly works part-time in running board affairs and mentoring the executive team.
  • The chairman directly manages the company’s board members and committees while the CEO directly manages the company’s executive directors.

Michael Tait works as an interim chairman or independent chairman for privately held companies.