ceoA Startup of a Fintech is redefining the role. Need your valuable advice.
Two co-founders of the co. One holding bigger share than the other but both are major shareholders and key people in the establishment. They are directors in the board too. Need to define the role in the management, apart from the identity of co-founder and company director. Questions:-
If the 1st man calls Chairman, can the 2nd man calls CEO? If the 1st man shd be the Chairman and CEO, what is the 2nd man?
Many thanks.
Chairman and CEO are two different roles.
Traditionally, the Chairman of the Board is the senior person on the company's board of directors, which is the group that legally has the final word on what the company does. The Chairman is elected by the other members of the board, and usually is neither an employee of the company, nor works full-time on company business. The board as a whole (but not the Chairman individually) is responsible for the company's overall strategy and major strategic decisions, as well as hiring (and firing) the CEO. The Chairman of the board will typically serve ex-officio on all board committees (including the executive committee), run all board meetings, and consult frequently with the CEO. While the Chairman has the same vote as any other director, there is often an implied seniority and gravitas to the Chairman's role.
The CEO is the Chief Executive Officer of the company. He or she is the highest ranking full-time employee of the company, to whom all other employees ultimately report. The CEO, in turn, reports directly to the full Board of Directors. In most cases, the CEO prepares the company's operating plan and projected budget with the guidance of the board, which is then presented to the board for approval. Similarly, the CEO handles all hiring and firing, and proposed employee option grants (which are then ratified by the board.)
The one exception to this structure is in the case of an Executive Chairman, which is a full-time, compensated, operating, employee role that directly manages the CEO (although depending on the particular company and people involved, both might instead directly report to the Board.)
Because all power in a company ultimately stems from the Board of Directors, which represents the interests of all shareholders, the Board determines just how much power it delegates to the Chairman and the CEO. So for a Chairman to "get more power", he/she needs to have sway over the other members of the board, either technically (because the Chairman has the right to appoint them) or unofficially (because the other members will take "sides" with the Chairman in the case of conflicts with the CEO.)
But from the subtext in the original question, I would caution that having a company where the Chairman and CEO are odds with each other is a toxic situation, of which no good can ever come. Much better for the party with the weaker hand to move on to another organization. Also read this blog
It is not uncommon at a small startup for the same person to be the Chairman of the Board of Directors and the CEO.
You could have the first person be the Chairman of the Board of Directors and the CEO.
You could have the second person be a member of the Board of Directors and another C-level officer position, such as COO.
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