Chair vs CEO: What’s the Difference?

While both the roles of the Chair and the CEO are critical to an organisation, it’s important to note that their responsibilities and focus areas are distinctly different. Both leaders in their own right, the roles require experienced individuals with a broad range of expertise and business acumen. In some cases, a Chair and CEO can be filled by the same person, or a Chair may have served as a CEO in the past. In this article, we’ll cover the Chair vs CEO difference, examining the responsibilities of each role, and how important each role is to the performance of the organisation.

What is the role of the Chair?

A Chair is the leader of an organisation’s board of directors. Their role is to ensure the board reaches consensus and that all board members fulfil their responsibilities. They understand the importance of fostering a cooperative and respectful environment, where every director feels heard and valued. They ensure discussions are productive, so the board can be an effective decision-making group. Additionally, the Chair works closely with the CEO, providing guidance, support and oversight, as well as managing performance reviews and succession planning for future leaders.

Chair responsibilities

The Chair’s primary responsibilities include:

• Presiding over board meetings
• Creating a purposeful agenda in collaboration with the CEO
• Appointing directors to committees
• Serving as the contact for any board issues
• Setting goals and objectives with the board and ensuring they’re met
• Holding members accountable for fulfilling their responsibilities
• Managing board, director and CEO performance reviews
• Managing succession planning for the CEO and directors

What is the role of the CEO?

The CEO, or Chief Executive Officer, is the highest-ranking executive in a company. Typically elected by the board of directors, the CEO is responsible for making major strategic decisions and managing the overall operations and resources of an organisation. They also report into the board and act as the main point of contact between the board and the senior management team. In most cases, they also serve as the public face of the company. In large corporations, CEOs typically only deal with high-level strategic decisions, however in smaller companies CEOs are often more hands-on and involved in the day-to-day running of the business.

CEO responsibilities

The CEO’s primary responsibilities include:

• Leadership on strategy
• Delivering results and monitoring company performance
• Leading the executive team
• Leading the culture
• Driving change and transformation
• Building talent and capability
• Stakeholder management
• Partnering with the board

Chair vs CEO: Similarities and differences

The main difference between a Chair and CEO lies in their areas of focus. While the Chair is concerned about the governance of the organisation and the effectiveness of the board, the CEO focuses on the management and operations of the business. Both are leaders in their own right, however a Chair has no unilateral decision-making authority when it comes to the day-to-day operations. That being said, the board is responsible for the hiring, monitoring and succession of the CEO. The Chair leads the board, the CEO leads the company.

Can the Chair and the CEO be the same individual?

In some cases, the Chair and the CEO positions are filled by the same individual. Currently half of the Chairs of the S&P 500 double as their company CEOs, although in many cases this is because they were the original founder of the company.

In companies where the Chair role is held separately, if the Chair is more experienced at being the chief decision-maker, there is a risk that they will be seen as an ‘alternative CEO’ within the company. This makes the Chair vs CEO difference more strained and can cause conflict and confusion amongst the board and executive team. In these cases, it’s essential to draw a distinct line between the Chair vs CEO to ensure the two understand their respective roles and can work harmoniously together in the best interests of the company they both represent. After all, an effective Chair must monitor and support the CEO, but also know when to step back and let the CEO run the company.

In the case where the role is held by the same person, it’s important to note that this can make the role of the board in overseeing the CEO challenging. Is the CEO’s performance being monitored effectively? Who is responsible for the succession plan? In this case, regular board evaluations would be recommended to ensure that the two roles are being carried out in the best interests of the organisation. Ultimately, the way in which a company chooses to operate and govern itself will depend on a variety of factors including the size and complexity of the organisation, the industry in which it operates, its regulatory environment and its culture.

Striking the right Chair vs CEO balance

While the Chair vs CEO roles are distinct, they’re both critical to the successful and ongoing operation of an organisation. The Chair leads the board in governance and oversight, while the CEO manages the daily operations and is tasked with executing on the strategic direction of the company. Effective communication and collaboration between the two roles is key to striking the right balance and ensuring a productive working relationship.