Difference Between CEO vs Owner

Difference Between CEO vs Owner

The difference between CEO and owner might not be obvious, but they have completely different roles within the structure of a company. Today’s post is designed to help you get to the bottom of what that difference is so that you fully understand how they operate.

Let’s dive further into the world of CEOs and owners now so that you can finally gain a total understanding of how they operate and what makes them integral to a business including the key areas in which they differ.

Definition of CEO

A CEO is: “Any individual holding the title of Chief Executive Officer for a small to large business who is ultimately responsible for the day-to-day operations, marketing opportunities, and the overall viability and commercial success of a company.”

Though it’s hard to separate CEO vs owner using the above description alone, we can easily separate the two when we start to look further into the typical expectations placed on a CEO. It’s firstly important to point out that a CEO can be an owner and vice versa. The difference at large is that a CEO position is very managerial and typically any owner who could afford it would likely delegate this duty to someone else.

Usually, due to the salary that a CEO position would command, it’s not feasible for an owner to hire a CEO unless the business is of a medium to large size as the turnover would warrant the recruitment of an external individual to act as a CEO as appointed by a chosen board of directors.

Smaller businesses typically have their owner acting in a similar fashion to a CEO. Some small business owners would also refer to themselves as a CEO, which in reality would simply involve an owner performing CEO duties.

Definition of Owner

An owner is: “Any person who has full or part ownership of a business of any size.”

An owner has full or part ownership of a business and doesn’t have to perform any managerial duties to be classed as an owner. They’re also an owner by virtue of their stake in a business and are not appointed an owner as per a CEO who is appointed by an owner or board of directors.

As previously stated a CEO position is managerial and usually appointed to someone who isn’t an owner in a medium to large-scale business to help drive it forward.

It’s also worth noting that you can be a part or full owner, but you can’t be a “part” CEO as it is a full-time responsibility. Financial management too is often delegated by a CEO but adopted in full by an owner should they be acting as a CEO in a small business.

Main Differences Between CEO vs Owner

We’ll now summarize the difference between owner and CEO in a quick reference table:

Basis of ComparisonOwnerCEO
OwnershipMust be a full or part business ownerDoesn’t have to be a full or part business owner
Nature of titleResidualManagerial
Answer toOwners do not have to report to anyoneReports directly to the board of directors
Appointed byNot appointed as title is dictated by the business stake an individual holdsAppointed by a board of directors or owner
Financial managementIf owners are running a business they typically take control of financial managementA CEO usually delegates financial management to a CFO

Difference Between CEO and Owner: Conclusion

After reading through today’s post, we now hope that you feel confident about this subject going forward. Though they may initially seem like they are one and the same, once you’ve reviewed the deeper intricacies that go into determining one from the other, it becomes quite apparent that they can be completely different.

Just try to remember that an owner can play a passive role in a business, or a direct one. A CEO, on the other hand, is a direct role that entails day-to-day operational involvement as a minimum requirement. This in a nutshell is where we find our difference between owner vs CEO.