COO vs. CEO: What Are the Differences and Similarities?

By Indeed Editorial Team

Published 16 August 2021

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.

If you want to advance to an executive position inside an organisation, it's critical to fully understand the differences between a COO and a CEO. Both COO and CEO are high-ranking executive roles, and the holders of these positions work hand-in-hand to ensure sustainable organisational development. Although a lot of people often use these terms interchangeably, there are differences in the responsibilities and expectations between a COO and a CEO. In this article, we discuss what COO and CEO do, the differences between the two and some frequently asked questions pertaining to COO vs. CEO roles.

COO vs. CEO

Although often used interchangeably, outlined below are some key differences between the duties of a COO vs. a CEO:

Corporate ranking and hierarchy

The major distinction between a COO and a CEO is their organisational hierarchical ranking. The CEO is the highest-ranking official in an organisation, and the COO reports to them. More significantly, the CEO is the leader and decision-maker who takes the ultimate decisions for the organisation's future, whereas COOs can only provide advice depending on the functions and present state of the organisation.

Job duties and responsibilities

CEOs are in charge and emphasise the overall long-term elements of operating an organisation, whereas COOs are more responsible for the organisation's present operations and financial position. In other words, the COO's duties are more concerned with the day-to-day operations and administration of the organisation, while the CEO's duties are more concerned with organisational management, including resource planning and allocation, operational oversight and corporate decision-making. Although COOs are free to make their own judgements on topics under their jurisdiction, the CEO has the right to overturn the COO's decisions if required.

The essence and necessity of the role

Not every organisation that has a CEO requires a COO. For instance, in small firms, CEOs frequently undertake the tasks of a COO while continuing to serve as CEO. This allows a CEO to carefully monitor their company as it expands. Moreover, a small firm may not have the financial resources and means to employ a COO on top of a CEO.

Ownership and shares

There's no fixed rule on the distinction between a CEO and COO when it comes to ownership and shares. While this isn't always the case, many CEOs own the firm or are stockholders, if not the majority shareholder. COOs, on the other hand, are less likely to be the majority stakeholder in their firm. But it's also possible that a COO possesses some shares in the firm.

What is a COO?

The COO, short for Chief Operations Officer, is a senior executive who manages and supervises an organisation's daily administrative and operational activities. The COO is primarily in charge of internal affairs matters. COOs are often regarded as an organisation's second-in-command and report to the Chief Executive Officer. The COO's primary responsibility is to translate the CEO's vision into a workable business strategy and carry out corporate plans based on an authorised business model. They play a critical role in ensuring that the entire organisation functions well and that the firm profits.

Although the COO is subject to the CEO's orders, they also possess the power to make their own judgements about the implementation of business strategies and the operational activities of the firm. In a lot of instances, COOs require professional experience and knowledge to strategise for the organisation. The responsibilities of a COO differ based on their relationship with the CEO. A COO's primary responsibilities often include the following:

  • Planning and liaising with stakeholders for financial planning and budgeting

  • Planning and establishing business plans to assure growth and reduce risk

  • Managing expenditures and expenses and coming up with tactical efforts to prevent loss of profits

  • Overseeing the auditing of the firm's revenue and expenditures

  • Reporting accurate financial reports

  • Delegating responsibilities between departments to ensure that every staff performs well

  • Establishing corporate rules that facilitate a healthy work culture

  • Overseeing the company's internal operations and the output of other executives

  • Assessing performances through data interpretation and developing business metrics

  • Managing relationships with business partners and actively engaging in expansion operations entailing investments, acquisitions and business agreements

  • Reporting important matters to the CEO

Related: What Is a Chief Operating Officer? (With Skills and Types)

What is a CEO?

The CEO, short for Chief Executive Officer, is the most senior and highest-ranking official in an organisation. CEOs are also the public front of an organisation and are accountable for its success. The CEO is responsible for making high-level judgements to secure the organisation's future longevity. With a greater external focus, a CEO often engages and collaborates with external stakeholders such as potential investors and partners, as well as government officials. Most CEOs rely on consultants and senior executives for advice on business choices, but the CEO is ultimately the only one with the authority to make the final decision.

Often, the CEO of a smaller organisation runs and manages all the activities of their business more directly, but CEOs of larger firms frequently outsource work to department heads so that they can focus on making important decisions and establishing a high-level corporate strategy. That said, a CEO's responsibilities vary depending on the size of the organisation. Nonetheless, all CEOs have a common goal of leading the creation and implementation of strategic plans to maximise shareholder value. The common responsibilities of a CEO entail the following:

  • Developing and implementing company vision and mission

  • Setting and carrying on overall organisational strategies

  • Consulting with the board of directors to determine the best course of action for the organisation

  • Interacting with various stakeholders such as shareholders, the board of directors, government officials and administration leaders on behalf of the organisation

  • Keeping up to date with the latest trends surrounding market landscape, expansion opportunities, competitor landscape and technological advancement in the field

  • Monitoring and analysing any risks as well as preventing any sort of loss and harm to the organisation

  • Participating in industry-related events to enhance leadership abilities, gather more knowledge of the different leadership styles, improve the organisation's reputation and boost the organisation's ability to succeed

  • Creating and establishing quantifiable, achievable and definable strategic goals

Related: What Is a CEO? Definition and Requirements

Frequently asked questions (FAQs)

These are some frequently asked questions about COO vs. CEO:

Is the COO higher than the CEO?

The CEO is the highest-ranking official in an organisation. They oversee C-level personnel encompassing the COO, CTO and CFO. The CEO is also more senior than the vice president and, in many cases, the managing director. The upper hierarchy of a CEO is the board of directors and the chairperson. All that said, a CEO holds a higher rank than a COO.

Related: Managing Director vs. CEO: Responsibilities and Differences

Who makes more money, CEO or COO?

Salary is another distinction between a COO and a CEO. CEOs typically earn more than lower-level c-suite executives like COOs since CEOs are accountable for the overall well-being of the firm. To provide context, in Singapore, the annual average salary for a CEO is $117,994, while the annual average salary for a COO is $84,469. These salary figures are not representative of every organisation as the actual number may depend on the type of industry, the organisation's size, the personnel's level of experience and expertise as well as a number of other factors.

Related: What Is C-Suite and How Do You Get There?

Is a COO higher than a president?

Depending upon the firm's organisational structure, the president may be the single leader of the firm or part of a co-leadership relationship with the CEO. The COO, on the other hand, is on the executive level, which is a step below the CEO or president. The CEO title is frequently awarded to the president or the chairman of the board, whereas the COO position is frequently awarded to the organisation's ranking vice president. But there are instances in the corporate world whereby presidents hold the COO role as well. In these cases, the COO typically has vice presidents for different functions such as marketing, human resource and finance reporting to them.

Is CEO the owner?

The word "owner" refers to a single proprietorship, whereas "CEO" refers to someone who has entire managerial authority for the organisation they're in. These titles are not mutually exclusive. The CEO may or may not be the owner, and the owner may or may not be the CEO.

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

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