Business Career

Difference Between CEO and COO


If you’re thinking about being an executive in a company, it ‘s important to make a clear distinction between the roles of the CEO and the COO.

The CEO and the COO are also high-ranking executive roles within an organization and work together to maintain company growth and maximize business profits. However, there are some variations in their work roles and aspirations. In this article, we will discuss the differences between the CEO and the COO.

What is a CEO?

The CEO is the Chief Executive Officer. He is the highest-ranking individual in the company. CEOs set corporate goals and make strategic decisions ( e.g. expansion to a new market or launch of a new product).

CEO is responsible for optimizing business value by defining the vision, long-term objectives, framework and direction of the company.

The day-to-day roles of CEO differ based on factors such as the size of the company and the field in which the company operates. The larger the company, the more likely it is that the CEO would commit considerable amounts of time to create a long-term plan.

CEO of publicly traded corporations must respond to boards of directors and work to optimize their shareholders’ return on investment. For small to medium-sized businesses, the CEO can become more involved in the day-to-day running of the company.

Typical Responsibilities of a CEO 

  • Executing overall corporate strategies
  • Consulting with the board directors
  • Keeping oneself up to date with the market environment, expanding opportunities, increasing business competitiveness and advancing technology in the industry
  • Monitoring and evaluation of all risks and preventing any loss and damage to the company
  • Participate in every industry-related event to improve leadership skills, develop the reputation of the company and increase the company ‘s capacity for success
  • Developing and setting strategic business goals which can be calculated, achieved and defined

What is a COO?

The meaning of COO is Chief Operations Officer. It is to the CEO’s second-in-command. COOs are taking the company’s vision from the CEO and transforming it into an operational business plan. They supervise all activities and ensure employees are working towards the goals of the company.

The roles of the COO differ by size and form of company. COO also works on the strategy with the CEO and other C-suite executives. The most common duties of the position of COO include managing day-to-day administrative activities, different business functions, and critical projects.

Typical Responsibilities of a COO 

  • Coordination of budgeting and financial planning with the stakeholders
  • Planning and creating a market strategy plan to ensure growth and reduce the risk
  • Managing costs and expenses, and designing tactical strategies to reduce the loss of profit
  • Monitoring the audit of company income and expenditure
  • Reporting correct financial performance;
  • Delegating tasks to employees to ensure that all staff work well
  • Developing business policies that promote a positive corporate culture
  • Oversight of the internal activities of the company and the efficiency of other executives
  • Evaluating performance by analyzing data and developing business metrics
  • Managing partnerships with business partners and actively engaging in growth activities such as recruitment, acquisitions and company negotiations
  • Report all the important matters to the CEO
  • Hiring top talent and preparing teams for success

Who is Higher: CEO vs COO?

The CEO; is the highest position inside the company. In the hierarchy, the COO comes second and reports to the CEO. The CEO may report to the board of directors, the investors, or the company’s owners, depending on the company’s structure.

Small companies do not have a COO at all, while the CEO may be the company’s founder (or one of the founders) or the board president. When companies expand and have more complicated procedures, they can need to employ a COO to advise the CEO and oversee all internal operations.

COO vs. CEO: What are the differences?

1. Job responsibilities

CEOs concentrate primarily on the overall long-term implications of operating an organization while COOs concentrate on the organization’s actual activities and financial position. Although COOs are permitted to make their own decisions on matters under their jurisdiction, the CEO still has the power to alter the COO ‘s decisions if necessary.

2. Corporate ranking

The major difference between a COO and a CEO is within an organization’s structural ranking. In an organization, the CEO holds the highest rank, and the COO reports to it. Most significantly, the CEO is the company’s manager and makes the final decisions about the business’ future, while COOs can only provide guidance based on the firm’s operations.

3. Shares and ownership

While not always the case, many CEOs either own the business or are the company’s owners, if not the main shareholder. Nevertheless, COOs are less likely to be the largest shareholder within their organization.

How to choose between becoming COO or CEO?

The decision between CEO and COO is based on your management background, experience, and skills. If you’re thinking about a career in a C-level position, use these steps to decide whether to be a COO or a CEO.

1. Get more experience

It is recommended that you begin your career as a COO before becoming a CEO, as this will provide you with the necessary experience to make sound decisions as a CEO. Having this prior experience may also help you decide whether you want to remain in the role of COO.

2. Consider your capabilities

Working as a COO means collaborating with the CEO. This can be used to prepare you for the role of CEO. When a CEO retires or resigns, the position is usually taken over by the COO, who is the next in the chain of command. You will most likely be familiar with the company’s overall operations by the time you take over the position. If you choose to stay as COO, you may be asked to assist in the search for a suitable replacement for the CEO.

3. Make a checklist

Making a checklist of the roles and responsibilities and evaluating yourself to see which position best fits you is one of the best ways to choose between the positions of COO and CEO. For example, if you are more skilled with internal organizational operations, you may excel as a COO.

4. Seek advice

You can also seek advice from people you know who work as executives to gain a better understanding of what to expect in both positions. This way, you can gain a broader perspective and learn more about both positions.


The CEO must have exceptional business judgement because only then will he/she be able to guide the team in correctly identifying problems, locating the issues in alternative courses of action, and selecting the most appropriate one. A COO, on the other hand, should have strong organizational, communication, and leadership skills in order to lead and guide the entire team.