A market economy provides a lot of freedom for business development. And the modern legal system supports and regulates many different forms of its organization. Often we hear words such as “CEO,” “CEO,” “company president.” What is the difference between all these posts? What functions do these people perform? Are there any differences between the director and the CEO? Let's try to figure it out.
Who and how can take a leading position in the company?
Any small or large enterprise has a founder. This is one or more people who have invested in the development of a company producing or providing services. That is, in fact, the founder is the founder. And his company can exist in different ways and in different forms: as a joint stock company, partnership, commercial or non-profit organization, etc.
There are three options for selecting a candidate for a managerial position: it can be one of the founders, a position can also be occupied by an employee, who has a number of functions and powers. This employee can be selected from among existing employees with experience and knowledge about the company. Suitable candidates for experience, skills and qualifications can also be selected from outside.
Thus, the differences between the founder and the CEO are significant, since the founder does not participate in the direct management of the company.
In any case, the person who holds this position assumes responsibility for the development of the company and the adoption of strategic decisions.
Features of the title of leadership position
The name of the top managerial position depends on several factors:
- whether the enterprise is commercial or not;
- how many companies (one or the whole network) will be subordinate;
- one or more people are founders of the enterprise.
As a rule, the word "director" is applicable to non-profit organizations. For example, the director of the school, kindergarten and any other organizations that do not have as their goal the receipt of commercial benefits.
Another option, when the word “director” is applicable, is the name of the position that leads a particular direction, for example, commercial director, director of advertising and public relations, director of human resources.
In commercial organizations, this post usually sounds like a "CEO." Another option is the "company president". Usually it is used when appointing one person to the place of head of several enterprises at once. For example, factories for the manufacture of chocolate, a network of confectioneries and shops, the founders of which are the same people.
Another feature depends on the number of founders. If the founder is one and at the same time occupies a leadership position, then it can be referred to as the "general director" or simply "director".
Who and how claims for the position?
If there are several founders in the company (board of directors), then they are the ones who approve the candidacy at a general vote. After this, the job description is drawn up, which spells out all the rights and obligations, powers and the degree of responsibility attributed specifically to the position, and not to a specific person. After that, the candidate is officially approved for the position of one of the authorized founders.
If in the organization the founder and the leader are one person, then the procedure for appointment to the position is carried out in a similar way. The job description is still drawn up and is a document regulating the powers of the director within the organization.
If the appointment takes place in a non-profit organization, then the approval is made in the authorized body to which the company is subordinate or also by the board of founders. For example, a school director is approved by the city or district department of education, and the director of the animal welfare fund is appointed by the board of founders.
General functions of directors of all types of enterprises.
Despite the differences, which we will discuss below, any director performs a number of functions and has a certain responsibility.
It is the director who signs, approves and concludes all current documents, reports, contracts, labor contracts. It controls expenses, the results of the organization’s work, is responsible for the safety of property, organization of labor safety.
The director makes strategic decisions based on the opinion of the board of directors, company development strategy or personal opinion.
What is the difference between a CEO and a CEO?
Let's try to understand the distinguishing features of the two posts. The difference between a director and a general director in an LLC, for example, is not so easy to notice. In fact, these are two managerial positions regulated by job descriptions and bearing a certain responsibility for the organization, its employees and activities.
The fundamental differences between the director and the general director begin when it comes to commercial activities. In commercial organizations, the CEO is led, and in non-profit organizations, the director.
The following differences between the director and the general director can be found if the term "director" is applicable to the head of the structural unit. In this case, the duties of the employee will be to control and ensure the normal functioning of only one specific area. Powers will be limited to the same scope. Whereas the CEO manages the entire enterprise as a whole.
Position "Executive Director"
The Executive Director is also a person involved in the management of the company. This can be either a member of the board of directors who has the function of direct management and, at the same time, obeys the opinion of the board, or a leader with less authority, submits to the general director. Thus, there may be two options for the candidacy for this position.
The differences between the executive director and the general director are subordinate. The first of them may be subordinate to the general or the president of the company, while the general director reports only to the board of directors.
The positions of Executive Director and Deputy General Director of Distinction are also present. The first may be the head of a subsidiary, be responsible for it to the general director or president of the company. He fulfills a leadership position in full. This distinguishes the Executive Director from the Deputy General.
In which case does a leadership position sound like a "company president"?
The differences between the president and CEO are as follows. The president of the company can be appointed if it is not about one enterprise, but about a whole group of organizations, a holding.
The functions of the president and CEO are similar, but the name of this managerial position indicates the size of the subordinate organization and its structure. The president’s subordination may include both the executive director and directors of structural divisions.
Thus, we can say that there are clearly differences between the director and the general director. Although in some cases they are quite difficult to notice. As well as the difference between the executive director and the president of the company and so on. This difference is visible to a greater or lesser extent depending on the situation and the characteristics of the organization.
In any case, according to the law, the name of the main managerial position is determined by the charter approved by the board of founders or the authorized body. Therefore, in similar organizations the same position may have a different place in the hierarchy.