What Is The Role of a President of a Corporation?
One of the highest-profile positions in a corporation is the company president. This crucial leadership role is often tasked with managing the day-to-day responsibilities of the team, executing new company strategies, and representing the brand in public whenever necessary. The exact details of the role can vary depending on the size and structure of the organization, but in most cases, the president acts as a key decision-maker, bridging the gap between executive leadership and the operational staff.
To better understand the role of a president in a company, let’s first review the main leadership roles that make up a corporation’s leadership framework. Generally, there are three tiers of power in a corporation:
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The shareholders are the owners of the company. A shareholder is not a hands-on member of the business, but instead votes on major corporate decisions, like electing board members and approving major corporate changes.
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The directors serve on the board and are responsible for the company’s overall management. Directors monitor a company’s management team and make decisions that protect and enhance shareholder value.
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The officers handle the day-to-day matters of the company as well as carry out the directors’ decisions and policies.
The President, Vice President, Secretary, and Treasurer are all examples of high-ranking officers who have roles in a corporation. If necessary, the board can also choose to appoint other officers, such as a Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Technology Officer (CTO), or any other title the board wishes to create.
The person who is President of a company is in the highest position within an organization and, in some cases, takes on the title of Chief Executive Officer as well. The President/CEO is often (but not always) the founder and owner of the business, meaning that they have an extended history with the brand, and are often familiar with the industry.
Roles and Responsibilities of a Company President
So, what exactly does the president of a corporation do? A company president’s job description tends to be a little more fluid than that of other roles in the business, but usually requires a balance of big-picture thinking and hands-on leadership.
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Clearly define and communicate the organization’s mission and consistently integrate it into business activities.
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Oversee the hiring and firing of all employees of the company.
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Provide executive leadership to managers and staff, ensuring the successful execution of daily operations and long-term objectives.
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Meet regularly with other officers or managers of the company to ensure that the organization's decisions are prescient and strategic.
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Confirm that all officers and managers are conveying the company’s philosophies and guidelines to their own teams so that all employees understand the expectations of the company.
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Oversee all the financial aspects of the company while staying attuned to trends related to market conditions, customer behavior, competition, and emerging industry developments.
Requirements to be the President of a Corporation
There are no universal legal requirements to become the president of a corporation. The president of a corporation can have as much or as little experience in the role as the company sees fit. In fact, it is relatively common for the president to be the original founder and owner of the business. There are several common qualifications and expectations that companies look for when selecting someone for this role, but these requirements vary greatly. When hiring a new president, a corporation may look for some of the following:
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Leadership experience: Most presidents have extensive experience in executive or senior management roles. A proven track record of leading a team is usually essential.
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Industry knowledge: Familiarity with the specific industry the company operates in allows the president to anticipate market trends and understand the customers’ needs.
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Educational background: Many company presidents hold a degree in business, finance, management, or a related field.
In most corporations, the president is formally appointed by the board of directors. This means the individual must earn the confidence of the board and shareholders, especially in large, public companies. In some cases, the president of a company takes on the title of Chief Executive Officer as well.
Difference Between a CEO and a President
A common misconception for first-time business owners is that the president and CEO are different names for the same role. While the roles of CEO and president are sometimes held by the same person, especially in smaller companies, they are distinct positions with different areas of focus. The CEO is typically responsible for making major corporate decisions and communicating with the board of directors and external stakeholders. On the other hand, the president of a company is more involved in the internal management of the organization and will sometimes report directly to the CEO.
As a first-time business owner, it’s important to know the role of a president in a company, as you may be taking on some of these duties yourself. And even if you delegate the role to someone else, knowing what to expect allows you to select the right person. Keep in mind that the role of president in a company is not standardized. These are general terms of a corporate President’s duties, but they may differ in individual organizations.
If you're planning to form a corporation of your own, you can get started on our website. Our team will be happy to answer any questions that you have along the way.
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There are 11 comments left for What Is The Role of a President of a Corporation?
Ben said: Monday, April 9, 2018Can the duty of the President conflict with the Chairman?
HBS Staff replied: Monday, April 9, 2018No, typically the President handles all the day to day matters and works alongside the Chairman to efficiently run the business.