What is the difference between a Limited Company Director and a CEO
Company directors and executives are responsible for making important decisions that contribute to the success of the company. Executive officers such as a Chief Executive Officer (CEO) are largely responsible for the operations of a company. In a limited company the CEO is accountable to the company director or directors, who in turn answer to the company's shareholders. A single individual may serve as both a company director and executive officer, especially in smaller organisations. In practice, many companies choose to separate the functions of a company director and CEO in order to avoid potential conflicts.
Company Director Responsibilities
A company director is typically elected or appointed by shareholders to serve on the board of a corporation or organisation. Company directors play an important role in making decisions with respect to the strategic direction of the company. In some companies, they may also play a role in decision making related to operational aspects of the business. Generally, they oversee the activities of the company and are accountable to shareholders.
The responsibilities of a company director are largely outlined in common law and the Companies Act, 2006. These responsibilities include applying skills, experience and independent judgement to make the company a success. A company director must also follow a company's rules and the authorities provided to them, which are outlined in the company constitution or articles of association. Individual directors must also make decisions that benefit the company and not themselves. As a result, any potential conflicts of interest or involvement in a business transaction must be declared. Company directors must also maintain accurate and timely company records, including financial records. Records and company information must be provided to Companies House and HM Revenue & Customs. All company directors must also be registered with Companies House.
The powers, roles and responsibilities of a company director are also determined by the company's articles of association, constitution or bylaws. A company's constitution, articles or bylaws typically determine the number of directors, the method of their selection, the frequency of their meetings, and the powers that they are given. Duties generally include setting salaries and compensation rates for the company's management team, approving annual budgets, selecting a chief executive officer, establishing general policies and objectives for the company, and ensuring the company has adequate financial resources.
Chief Executive Officer Responsibilities
Sometimes known as inside directors, executive officers may be an employee, officer, shareholder or another individual directly connected to the company. Examples of executive officers include the Chief Executive Office and the Chief Financial Officer. Executive officers are employed by the company to manage the business. In some companies, a Chief Executive Officer (CEO) may serve as the Chairman of the Board of Directors.
A Chief Executive Officer is responsible for the day-to-day management and operations of a company. The CEO or Chief Executive Office is also the primary ‘face' of an organisation. The position is the top corporate executive or administrator within a company. They supervise and oversee the management of the company and are responsible to the board of directors or other authority depending on the structure of the company. The CEO also leads the development and implementation of a company's long-term strategy in collaboration with the company's directors. They liaise directly between the management of the company and the board of directors or other authority, serving as a representative for the company's management team.
Depending on the legal structure of an organisation or corporation, the CEO's powers and responsibilities are established by the company director, board of directors or another authority rather than law. A CEO's responsibilities may include directing the company and making high level decisions on policy and strategy. They also lead the company, provide advice to the company director or board of directors, and help drive and manage change within an organisation. In addition to overseeing the day-to-day operations of the company, a CEO also motivates employees. A CEO has the authority to hire and terminate staff, and is also responsible for ensuring the company is organised and staffed appropriately. The chief executive is also responsible for ensuring expenditures are within the approved budget for the company, monitor and manage risks of company activities, develop and monitor internal and legal controls, and maintain high standards of social responsibility.