CEO Vs. Founder: Definitions, Differences And Similarities

By Indeed Editorial Team

Published 11 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

When a person or a group of people start a business, they usually assume leadership roles within the firm. There are different types of leadership positions or professional titles for business owners, such as chief executive officer (CEO) and founder. Knowing the differences and similarities between a founder and a CEO can help you understand their roles in a company and assist them in performing their activities. In this article, we compare CEO vs founder, discuss some characteristics of a CEO and list essential skills for a founder.

Comparing CEO vs founder

If you want to understand the roles of these two positions or are applying for a job that comprises helping them achieve business objectives, you may benefit from comparing CEO vs founder. Starting a company always comprises accepting risks related to capital, time, reputation, professional and personal life. On the other hand, the same elements may also encourage an individual to establish an organisation. Laying the foundation of a company can also result in financial rewards, life-fulfilling experiences, public recognition and economic freedom. Often, these are the benefits and goals an individual may look for if they decide to establish a company.

Organisations generally require a clear structure to provide order and leadership, which means clear policies, protocols, and different decision-making instances. Leading a company involves commitment, requires ambition, demands character and entails responsibility. Conducting and motivating a group of people while facing legal and moral responsibilities is a task that needs experience, education and professional proficiency. The roles of a chief executive officer (CEO) and a founder may have some similarities, but these two positions are completely different. To better understand how these roles differ from one another, you can review their definitions.

What does a CEO do?

A chief executive officer (CEO) is the highest position within an organisation. Typically, these professionals possess the experience, educational background and a broad network in the company's industry that enables them to direct the organisation. A CEO's key objective is to help all stakeholders work as a team to achieve the business goals and materialise the company's vision. In small companies and startups, a CEO may also act as a chief financial officer (CFO) or chief operating officer (COO).

Roles and responsibilities of a CEO

CEO's are often responsible for protecting or increasing the value of the company. Here are some responsibilities and duties they may have:

  • overseeing the overall operations of the company

  • setting up business objectives aligned with the organisation's business vision

  • managing and allocating human and financial resources to enable the company's operations

  • establishing and monitoring financial controls to ensure the best use of resources

  • assessing, establishing and enforcing policies throughout the firm

  • acting as a facilitator between the board of directors and middle managers

  • participating in the hiring process of executives, directors and middle managers

  • assessing business opportunities for new products or services, expansions, potential mergers, or business alliances

  • representing the company before authorities, the press and the general public

  • evaluating the company's short- and long-term business strategies

  • monitoring liquidity levels to ensure that the company can cover its operating expenses

  • ensuring the company's social and environmental responsibilities through activities where all stakeholders can participate

  • monitoring and coordinating operations with subsidiaries, branches and regional units

What does a founder do?

A founder is an individual who alone or with one or more partners created an organisation with a certain purpose. They usually start the company by proposing, evaluating, and materialising a business idea. A founder is generally a person who can tolerate high levels of risks, sell and present their ideas to others and project confidence about their plans. Although most companies start with an idea, to materialise it, a founder may develop a business plan, raise enough capital for starting operations and attract the professionals needed. Sometimes, these tasks may also require time and constant adjustments.

Roles and responsibilities of a founder

Here are some responsibilities and duties a founder may have:

  • recruiting the first employees of the company, which might be responsible for initiating operations

  • pitching the initial business idea to potential investors, which can help raise capital

  • developing a business plan to describe all the steps the company may take to become profitable

  • splitting the company's original ownership to establish clear and fair proprietorship among partners

  • evaluating, negotiating and purchasing the first equipment and machinery for the organisation

  • addressing investors' concerns by presenting business projections based on research and factual data

  • assigning responsibilities and roles among partners, which can help them distribute activities legally required to initiate a business

  • planning a launch day and an initial campaign to announce to consumers and suppliers that the company has started operations

  • creating an appropriate business structure for the company, which can allow or limit its future expansion

Essential characteristics of a CEO

The following abilities are crucial for a CEO to perform their duties:

Communication skills

CEO requires strong communication skills to be able to speak with different managers throughout the organisation. They can also use this ability to deliver their reports to the board of directors. Employees may expect good communication skills from their leaders, as CEOs are responsible for conveying business goals, strategies, policies and protocols. These professionals also benefit from having outstanding communication skills, as they may get the opportunity to face press conferences and talk with members of the community. For example, during an interview, the CEO can express their optimism, talk about their business models and share how the company is contributing to the community.

Networking skills

It is extremely beneficial for a CEO to build professional relationships across the organisation and within the industry. They can do this by contacting customers or clients, colleagues, employees, executive members, competitors, vendors, government representatives, and members of the community. These relationships can build a positive image around the CEO and the upper management. It can also encourage loyalty among customers and employees and show transparency to the press.

Listening skills

Listening skills refer to the ability to listen attentively to employees, members of the board, middle managers, customers and suppliers. This skill can provide a CEO with different points of view and experiences that are necessary to address several issues while directing a company. Listening can also encourage confidence and loyalty among employees, as they may feel that their leader can listen to their ideas and opinions. An outstanding leader is usually an individual who collects and evaluates all the information before making a business decision.

Creativity skills

Creativity is essential to address issues across the organisation, solve problems or propose a new business strategy. A creative approach is usually a flexible way that a CEO may use to improve the company's performance. Traditional or usual methods sometimes can lead to undesired outcomes. For example, if a CEO wants to increase productivity levels within the company, they can introduce some physical changes in the workplace, reduce working hours and launch some family events. This may be more efficient than gathering all the employees and delivering a speech.

Essential skills of a company founder

The following abilities are vital for a company founder to perform their duties:

Leadership skills

Starting a company requires confidence and the ability to convince investors and potential partners that you can build a successful business. Having strong leadership skills can help you convince the right professionals to work with you. Starting a company entails several duties and responsibilities, and a strong leader usually looks for them to find the best way to address them. Investors, partners, members of the community and authorities expect a founder to act as a role model capable of influencing the behaviour of others.

Coaching skills

Coaching a partner or an employee involves being positive, highlighting their strengths, reviewing past situations that they handled using their knowledge and proficiency and listing their best skills. Coaching also means establishing a responsive relationship with colleagues and partners, which means showing genuine appreciation for their personal and professional life. By sharing information, you can ensure that everyone within the project feels included which forms an important element that can also motivate the group.

Teamwork skills

The core of business relies on its team, meaning that it is important for a founder to grow an excellent relationship with their team members. To do that, a founder may promote a shared business vision, establish clear objectives and distribute responsibilities fairly. A founder may not undertake all the tasks involved in the creation of a company, so it is vital to trust in the team and their professional abilities.

Explore more articles