We’ve all heard the terms ‘CEO’ and ‘managing director’, but what do they actually mean? Corporate titles are names given to company officials in order to show what duties and responsibilities they have within the company or organisation. Perhaps the most popular corporate title, chief executive officer (CEO), designates the most senior member of corporate management. Similarly, a chief financial officer is responsible for overseeing and managing a company’s financial operations. Within the financial world, at a more junior level, analysts assist more senior employees in analysing information pertaining to business deals, researching prospective clientele, and reviewing historical market data, for instance.
Chief Executive Officer (CEO)
Occasionally referred to as ‘chief administrator’, the chief executive officer (CEO) is the most senior manager of a company, tasked with overseeing the management of all aspects of the company. Generally speaking, a CEO will report to the company’s board of directors – a group of individuals responsible for the overall supervision of a company’s activities, including the performance of the CEO. In modern business practice, the CEO of a company undertakes activities and executes decisions conducive to maximising the value of the business. In this way, CEOs of for-profit corporations serve to enhance the generation of profit, although they are jointly responsible for numerous other aspects of the company’s operation, including furthering the organisation’s designated mission, managing workplace culture, and maintaining ethical business practices, for instance. As per standard business regulation, CEOs operate at the discretion of the board of directors, although this may not always be the case. Consequently, the responsibilities of the CEO may vary from organisation to organisation, as such responsibilities are established by the board of directors. For example, a for-profit company’s organisational mission may incorporate responsibilities directly related to the fiduciary duty of the company’s management, whereas a nonprofit organisation’s mission may pertain to issues of societal wellbeing and benefit. Either way, the CEO is responsible for furthering and delivering an organisation’s mission. Needless to say, they are often considered the most crucial figure in organisational hierarchy.
Chief Operating Officer (COO)
Also known as a ‘chief operations officer’, the chief operating officer of a company is a senior executive responsible for overseeing the principal operational function of the company. Like a CEO, the COO is a ‘C- suite’ executive, meaning they are one of the numerous chief officers of the company (specifically, ‘C’ refers to ‘chief’). So, you ask, what do COOs actually do? In short, it depends. Because the operations of any given company largely depend on the nature of the company itself, the role of the COO can vary considerably. For example, the operations managed by the COO of a pharmaceutical company may involve the management of, say, drugs and clinical treatments. By contrast, the COO of an investment bank may oversee financial instruments, securities, and day-to-day trading operations. Evidently, there are notable differences between different industries and – often – even between businesses. With this being said, there are common operations and functions that almost every COO is responsible for. Broadly speaking, COOs are tasked with overseeing a company’s internal affairs, whereas – oftentimes – the CEO will act as the ‘face’ or public representative of the company. Although this might not always be the case – that is, where the CEO is the ‘face’ of a company or organisation – COOs are always somewhat responsible for the company’s overall internal operations and affairs. Further, in many cases, a COO is implemented specifically to support the functioning of a company’s CEO, such as in the case of a small-scale startup. In such instances, the COO will deliver a set of complementary skills and capabilities, so as to enhance the overall effectiveness of the organisation’s management.
Chief Financial Officer (CFO)
The chief financial officer of a company is a C-suite executive responsible for overseeing the financial operations of a company or organisation. In this sense, chief financial officers are responsible for managing a company’s financial planning, record-keeping, reporting, and risk management. Although the COO will often play the second most pivotal role (behind the CEO, of course) within a company, in finance and investment banking businesses, the CFO may play an even more important role, largely as a result of the fact that they – in a way – will deal with many more of the company’s operations than the COO. For the most part, however, within non-finance companies, the COO will perform a more crucial role in the overall management of the company. Traditionally viewed as a financial specialist, the CFO has developed into a more advisory role, now often acting as a strategic advisor to the CEO or COO. In this way, the CFO may act as a business partner of sorts to the CEO, helping to formulate the overall company strategy and mission. Unlike many other chief officers of a company, the CFO is – for the most part – regressing towards a more managerial role. Whereas traditional CFOs may have dealt directly with accounting and financial issues in a specialised, individual fashion, CFOs nowadays often delegate work to analysts, associates, or lower-ranking managing directors. Trusted business author Martin Zwilling even argues that "The CFO of tomorrow should be a big-picture thinker, rather than detail-oriented, outspoken rather than reserved, prefer to delegate rather than be hands-on, emphasise what gets done rather than how things are done, and make collaborative rather than unilateral decisions."
Managing Director (MD)
Generally speaking, within a business context, a managing director (usually abbreviated as ‘MD’) is the highest level of manager one can reach without becoming a group head or C-suite executive. MDs are specialised in a specific area or department of a business and are often responsible for overseeing teams within this area or department. Much like a COO, MDs are concerned with the operation and functioning of a company, although on a much smaller scale. For example, while COOs will oversee the entirety of a company’s operations, an MD may only focus on emerging markets or risk management corporate divisions, for example. Within an investment bank setting, MDs may execute high-value financial deals and transactions. By contrast, an MD of a publications company may win publication agreements in specific market regions. Regardless, the role of the MD is to further the profitability of his or her organisation, usually in a specific region or area. Note that managing directors are often not a member of an organisation’s board of directors, instead offering guidance and advice to members of the board.
Comments