Chief Operating Officer COO Definition

Difference Between CEO and COO

The term executive director is more frequently used in nonprofit entities, whereas CEO is used with for-profit entities and some large nonprofits. While there are many different ways a corporate structure is set up, the basic corporation is headed by a board of directors. The CEO is the highest ranking officer with direct responsibility for the management of the company, and answers to a board of directors.

What is the most important job of a CEO?

The CEO is the highest-ranking employee within any organization; they report to the Board of Directors. Core responsibilities include setting and executing the organization's strategy, allocating capital, and building and overseeing the executive team.

CEO is responsible for the success or failure of the company.COO is responsible for the smooth functioning of the company process. Evaluating and organizing all the operative and administrative functions inside the company.

How much money does a COO make?

The CEO is often the public face of the company, while the COO typically works behind the scenes. The CEO is responsible for making decisions that will affect the long-term direction of the company, while the COO focuses on operational issues that need to be addressed in the short term. If the organization is a private company, then the CEO may also be the CFO unless otherwise required for compliance issues. However, publicly traded companies must have two separate CEO and CFO roles for compliance, separation of duties, and attestation. According to the BLS, top company executives generally need to have earned at least a bachelor’s degree to qualify for one of these higher-level positions. This is in addition to having “considerable work experience” within the field.

Is CEO the owner?

Ownership in legal terms is someone who has almost all or all of the company's shares in their name. A CEO, on the other hand, is a title that has nothing to do with ownership and more to do with function.

He is the topmost executive personnel in a company and the prime decision-maker, though s/he will get suggestions from the Board. S/he is the person responsible for the success or failure of the company. Both these roles are of immense importance in a company that is carrying out operations in very large quantities and quality. Executives and other leaders—collectively known as upper management—hold the primary decision-making power in a company. When Lane came on board, he integrated packaged software and high-margin professional service. In this aspect, he was selling two products in one cycle, increasing revenues from one sale. And according to him, because the people providing the professional service were experts on the product, the company could charge a high price for it resulting in a high margin.

COO vs. CEO: What are the differences?

They might analyze potential investment opportunities and decide if expenses are worth long-term financial success. With new finance laws, they might communicate the updated requirements to their teams to ensure they update their processes and data as needed. The CEO is the face of the company, and they are often responsible for maintaining relationships with shareholders, clients, and employees. They must also be able to effectively communicate the company’s vision and goals. As the CEO is the most senior executive in a company, they are typically paid a large salary and have a significant amount of stock options. Senior managers such as CFOs typically hold higher organizational positions than a vice president, or VP.

It is prevented from doing so, perhaps, because it is so misunderstood. The work of the COO commences after the CEO has established the goals, plans and strategies of the company. Some of the tasks assigned to the COO are recruiting people and assigning responsibilities, communicating with the employees and ensuring that everyone comprehends their responsibilities. CEO and COO are two of the highest positions in an organization. However, people are often confused about the roles and responsibilities of the two organizational positions.

A Plan

In some corporations, the COO is known by other terms, such as “executive vice president of operations,” “chief operations officer,” or “operations director.” A chief operations officer is usually the second in command within a business. The primary responsibility of a COO includes overseeing the day-to-day administrative and operational areas of the business. The CEO is the leader of a company and is responsible for directing and setting the organization’s policies, vision, and goals. CEOs have authority over all other company personnel as they have the last say in policy and management decision-making.

  • The term CEO stands for Chief Executive Officer and is the post of the highest ranked person in a company who is responsible for making all the managerial decisions.
  • To be concise, the CEO and COO are the programmers, designers, and maintenance persons of the basic wheels of the company on which it travels.
  • Regular evaluation of the work quality fetched by the other executive officers.
  • A rapidly growing entrepreneurial venture might seek an industry veteran with seasoning, wisdom, and a rich network who can develop both the CEO and the emerging business.

CEOs are often considered as the head honcho, the number one person-in-charge ‘“ the Captain of the ship if you will. It can be said that all persons involve in the company’s operation report to the CEO, including the COO but let’s get to that later. Formulating business plans strategies and budget for consideration by the company’s board of directors and implementing them.

What’s a COO?

When not writing, Kimberlee enjoys chasing waterfalls with her son in Hawaii. Hearst Newspapers participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. If we want to explain the difference between CEO and COO in one sentence, we’d say that CEOs are in charge of where the company is going, while COOs are in charge of how the company will get there.

Petco reorganizes leadership team, names new COO – Retail Dive

Petco reorganizes leadership team, names new COO.

Posted: Thu, 11 Aug 2022 16:23:53 GMT [source]

You can view our other newsletters or opt out at any time by managing your email preferences. The CEO focuses on external issues by collaborating with external stakeholders, partners and investors.


If you’re considering a career in a C-level position, follow these steps to choose between COO or CEO. S/he is the person who has a vision for the company, devise plans, strategies, and working flow for a company in all the aspects possible. A chief financial officer is the senior manager responsible for overseeing the financial activities of an entire company. A COO typically has extensive experience within the field in which Difference Between CEO and COO a given company operates. COOs often work for at least 15 years, climbing the corporate ladder. This slow build helps prepare COOs for their roles, by letting them cultivate extensive experience in the practices, policies, and procedures of their chosen field. The CEO oversees that long-term strategy for the business, whereas the COO executes the day-to-day operations to ensure the business is heading in the right direction.

Difference Between CEO and COO