CEO vs. Owner: What’s the Difference? (Explained) (2024)

Every organization, regardless of its size, needs its operations to be well-coordinated and streamlined to realize success. In order to achieve this feat, everyone in an organization’s corporate structure, no matter their position, needs to understand their roles and responsibilities.

Unfortunately, that’s not always the case. Among the top executive leadership positions at any corporate organization are two that usually cause confusion about their individual roles and responsibilities. These are the owner and the CEO’s roles and responsibilities.

The difference often (but not always) has to do with the organization’s size. While most small companies are run by an owner, larger companies usually have a CEO as its highest-level executive in charge. The owner has sole proprietorship of the company and can also be the CEO. On the other hand, the CEO is in charge of the company’s overall management but doesn’t necessarily have to be the owner.

This post will discuss the differences between a CEO and an owner and how board management software can help executive leadership and other members of the board of directors improve board effectiveness.

A CEO is the highest-ranking executive suite leader in a company. Generally speaking, a CEO’s primary responsibilities include making strategic corporate decisions, managing the resources and overall operations of the company, and acting as the primary point of communication between the board of directors and shareholders. In most cases, the CEO also serves as the public face of the company.

CEOs are usually elected by the board and the company’s shareholders. They typically report to the shareholders and the board. In some companies, the CEO can be the chair of the board.

Roles and Responsibilities

A CEO’s roles and responsibilities vary from one organization to another depending on the organization’s culture, size, and corporate structure. In small organizations, CEOs are usually more hands-on and involved with day-to-day operations. In larger organizations, CEOs typically handle high-level strategic decisions and those that determine the company’s overall growth trajectory.

Here are the general roles and responsibilities of a CEO:

• Overseeing the company’s overall operations: While they often don’t involve themselves with the company’s day-to-day operations, CEOs are tasked with making large-scale decisions that affect all the organization’s daily operations. In short, CEOs formulate strategies to help the organization attain its goals and ensure every employee has the resources they need to execute their tasks effectively.

• Managing the company’s organizational structure: The CEO guides and leads executive suite leaders and senior managers, depending on the organizational structure of a company. With advice from shareholders/owners and the board of directors, they implement the organization’s goal and vision by assigning directives to executives and senior managers.

• Driving revenue and profitability: CEOs formulate and implement strategies for improving an organization’s revenue generation and profitability.

• Communicating with the board: The CEO is the primary contact person who presents business goals, strategies, and results to the board of directors, and then works to implement the board’s decisions. They also make public announcements on behalf of the organization and the board.

Pay and Notoriety

The salary of CEOs varies depending on the size of a company, where it is located, and the type of industry. The average salary for a CEO in the United States is $112,628 per year.

Given CEOs’ frequent dealings with the public, it’s not uncommon for them to rise to fame, especially if their companies are successful. Take Elon Musk (CEO of Tesla), for instance. As of 2023, he has approximately 134 million followers on Twitter.

An owner is a financial stakeholder of a business or company, usually with an equity position in the organization. They may be entitled to the profits of a business based on their weight ownership since a business may have multiple owners.

Owners (shareholders) usually appoint the board of directors. That said, it’s crucial for them to balance between inside vs. outside board of directors when making the appointments to create a balanced board that will help ensure the company is successful.

Roles and Responsibilities

The roles and responsibilities of an owner change depending on the company’s needs.

In some instances, the CEO and the owner are the same. This is usually common in smaller organizations. When an owner also serves as the CEO, they will execute the roles and responsibilities of both positions.

If an owner started the company, they would use the dual title of owner and founder. To grow their company, a company owner needs to appoint and delegate responsibilities to employees.

Pay and Notoriety

It’s challenging to pinpoint the average pay for business owners, given that the size and scope of businesses vary broadly. Depending upon the size of a company, profit shares or percentage of ownership, and expenses, the salary for business owners can vary vastly. Small business owners earn a salary of between $64,800 and $156,000 annually, a figure that usually increases with medium and large businesses.

Owners of successful businesses usually gain notoriety, especially since media stations are always looking to tell the story behind their success. Examples of famous business owners include Mack Zuckerberg, Bill Gates, and Oprah Winfrey.

One of the key determinants of your organization’s success is your board’s effectiveness. As such, it’s important to ensure your board has all the tools and resources it needs to execute its tasks effectively.

You can improve your board effectiveness by leveraging board management software such as OnBoard. Our board management software provides a shared space for board members to store and easily access board information they need to facilitate board governance. It also has features that streamline board meetings and encourage communication and collaboration between board members.

Other ways board members can utilize board management software include:

• Preparing for board meetings
• Accessing important board information
• Controlling access to board information
• Recording and storing board meeting minutes
• Writing an executive summary for a board report
• Streamlining board administration

Board management software is a vital tool for boards looking to optimize their productivity.

Want to get started with board management software? Check out our free Board Management Software Buyer’s Guide to determine the right solution for your board.