Difference Between Chairman and President

With passage of time, organizational structures have become bigger and more complex than ever. One gets to hear nomenclatures for various management posts that are often very confusing for common people who cannot make out the difference between a chairman and a president, leave alone COO, CEO and many more such posts. This article intends to focus upon differences between Chairman and President.

The Chairman of a company is generally the chairman of the board of directors that manage the affairs of the company. Chairman is the head of board and in nearly all cases, there is also a President who is the real head of the company. Chairman is not directly involved with the operations of the company. Even the title of President is, in majority of cases, honorary and, it is when you hear terms like President and CEO or President and COO that you see clear cut and well defined roles and responsibilities of such posts.

When there are both the President and the Chairman in a company, it is the President who keeps the Chairman of board of directors informed about developments in the company on a regular basis and also whenever there is a meeting of the board of directors. In small and medium sized companies, it is possible for the same person to hold the titles of both the President and the Chairman.

In large corporations, to prevent power being concentrated in the hands of a single person, roles of President and Chairman are performed by different persons. This is also done to avoid any clashes between the governance team and the management team.

President is often subordinate to the Chairman. He is accountable to the board of directors and thus Chairman for the performance of the company. When President also takes upon the responsibility of the CEO, he is the most powerful officer of the company but still remains accountable to the Chairman. President and CEO is the captain of the ship and everyone in the management looks up to him for guidance.

Chairman of the board of directors is often elected by the shareholders and is responsible for protecting the financial interests of the shareholders and is more concerned about company’s profitability and stability. He, along with the other members of the board discusses and evaluates the performance of top level managers. Chairman has the power to vote out the President of a company. On the other hand, President is the face of the management in a meeting of board of directors presided over by the Chairman.