What does ceo coo and cfo stand for

These two roles are at the top of a company’s hierarchy. But, if we compare the CEO vs COO, we’ll find that their roles and responsibilities are not always clear. Let’s dig into their similarities and differences by starting with a definition of CEO and COO.

Contents:

What is a CEO?

The CEO meaning is Chief Executive Officer. This is the highest-ranking person in the company. CEOs formulate business objectives and make strategic decisions (e.g. expansion in a new market or development of a new product).

What is a COO?

The COO meaning is Chief Operations Officer. This is the second-in-command to the CEO. COOs take the CEO’s vision for the company and turn it into an executable business plan. They oversee all operations and ensure that teams work toward achieving the business goals.

Who is higher: CEO or COO?

The CEO; this is the top-ranking position within the company. The COO comes second in the hierarchy and reports to the CEO. Depending on the structure of the company, the CEO could report to the board of directors, the investors or the founders of the company.

Small companies might not have a COO at all, while the CEO could be the founder of the company (or one of the founders) or the chair of the board. As companies grow and have more complicated procedures, they might need to hire a COO to advise the CEO and manage all internal operations.

What is the difference between CEO and COO?

If we want to explain the difference between CEO and COO in one sentence, we’d say that CEOs are in charge of where the company is going, while COOs are in charge of how the company will get there. In other words, the CEO has a vision for the company and the COO executes it. But, this doesn’t mean that the CEO spends their time in vague plans or that the COO only has a transactional role.

Both of them have high-level responsibilities that affect the success of the business. CEOs rely on COOs to keep an eye on daily operations and provide their insights in the course of organizational changes. On their part, COOs will make strategic decisions and establish company procedures once they get input from CEOs regarding bigger picture plans and shareholders’ perspectives.

To better understand their differences, let’s compare these two roles side-by side:

CEO vs COO

CEO COO
First in command Second in command
Reports to the board of directors Reports to the CEO
Sets the company vision Executes the company vision
Is accountable for the success or failure of the company Is accountable for how well the company functions
Oversees long-term planning Oversees day-to-day operations
Has an external focus, collaborating with investors, partners and other external stakeholders Has an internal focus, working with various departments to ensure procedures operate properly and policies are implemented effectively

Related resources:

The chief operating officer (COO) is the second-highest C-suite executive rank after the CEO. The primary responsibility of the COO is to oversee business operations, which may include marketing and sales, human resources, research and development, production, and other functions.

Is COO higher than VP?

The COO usually has more work scope than an Executive Vice President. But the Executive Vice President generally has more power and responsibility than a COO. That is why an Executive Vice President is higher than a COO.

Who is the most powerful person in a company?

In general, the chief executive officer (CEO) is considered the highest-ranking officer in a company, while the president is second in charge; however, in corporate governance and structure, several permutations can take shape, so the roles of both CEO and president may be different depending on the company.

  1. Finding a job
  2. Differences Between a CEO, CFO and COO

By Indeed Editorial Team

Published September 29, 2021

At many organizations, the C-suite, or the group of the highest-ranking executives, all perform different roles that can contribute to an organization's success. Roles like the chief executive officer, chief operations officer and chief financial officer work together to ensure areas like operations, human resources, marketing, sales and finance align with company-wide goals. Understanding the differences between these positions can show why each is important. In this article, we discuss the responsibilities of CEOs, CFOs and COOs and examine some of their key differences.

Related: A Guide to the C-Suite Path: What You Need To Know

What is a CEO?

The chief executive officer, or CEO, is often the highest-ranking executive for a company. Working with other executives, they decide on a company's strategy and vision while understanding the company's overall operations and finances to help execute strategies. Some of the key responsibilities of a CEO include:

  • Overseeing a company's overall business and operational performance

  • Developing and communicating company strategies and missions

  • Determining growth strategies and researching tools, investments and acquisitions

  • Meeting with board members and shareholders to discuss business performance and strategies

  • Determining company policies and procedures

  • Representing the company at seminars, conferences and other public-speaking events

  • Providing guidance to other executives

  • Reviewing financial reports and agreeing on company budgets and goals

  • Conducting performance reviews for executives and assistants

  • Ensuring staff understands the company's vision and leadership's plan to execute it

Read more: What Is a CEO? (And Why Are They Important?)

What is a CFO?

The chief financial officer of a company is the top financial executive. They oversee all the financial responsibilities of an organization, including reporting, reconciliation, treasury, accounting and auditing. Working closely with the CEO, they ensure the business has balanced spending and earnings that lead to business growth. Some of the key responsibilities of a CFO include:

  • Managing finance and accounting executives and their organizations

  • Developing financial strategies to increase revenue and profits

  • Determining financial policies and procedures

  • Developing long-term strategies and investments

  • Meeting with board members to discuss the company's financial status

  • Ensuring other departments follow financial procedures

  • Managing tax reporting and payment processes to ensure timely completion

Read more: What Is a Chief Financial Officer?

What is a COO?

The chief operating officer of a company is the executive responsible for a company's daily activities and operations. They often are the second-highest-ranking executive in a company after the CEO. COOs work with each department to determine and review processes to ensure a business operates efficiently. Some of the key responsibilities of a COO include:

  • Ensuring leadership and staff fulfill the mission and goals set by the CEO

  • Assisting executive leadership by ensuring they have the resources and processes needed

  • Working with the CFO and CEO to understand strategic goals

  • Setting goals for the company and staff

  • Creating metrics and tools for leadership to use for improving performance and financial growth

  • Providing and communicating reports and process diagrams for teams

  • Overseeing the execution of new processes, tools and strategies

  • Assisting with budgeting and forecasting

  • Working with strategic partners to develop new processes and tools

  • Ensuring compliance with company policies and procedures

Related: What Is a Chief Operating Officer? (With Job Requirements)

CEO vs. CFO vs. COO

CEOs, CFOs and COOs work together frequently with the goal of creating a successful and efficient business. In some smaller organizations, companies may combine these roles to share responsibilities or teams. For many larger corporations, there are key differences that help each contribute to an organization's success. Here are some ways in which the three roles differ:

Responsibilities

The responsibilities of each C-level executive often involve meetings with other executives and reviewing high-level reports and strategies to help determine the direction of a company. CEOs rarely involve themselves in day-to-day operations. As they determine a company's mission and goals, they often review results and projections to ensure the company can achieve its goals. COOs often work with their teams and different departments to understand their daily operations. They may research tools and processes that teams can use, oversee the hiring process, meet with directors and review process documentation to advise on how staff can improve efficiency.

CFOs, different from both, set and review financial performance, policies, procedures and ensure company compliance. They might analyze potential investment opportunities and decide if expenses are worth long-term financial success. With new finance laws, they might communicate the updated requirements to their teams to ensure they update their processes and data as needed.

Strategy

Each role helps in determining company strategies and ensuring all departments understand the company mission. CEOs often gather information from COOs and CFOs about the operational and financial performance of a company and decide on the larger strategy. From there, the COO might then create goals to ensure teams have the needed information and tools to support the company's goals. Similarly, the CFO reviews financial information and determines how accounting processes can help ensure they can execute the strategy and earn profits.

Salaries

Salaries for each position could vary based on industry, experience and location. The average salary in the US for a CEO is $116,438 per year. The average salary for a COO in the US is $119,221 per year. CFOs earn an average of $128,215 per year.

Teams

Sometimes, C-level executives work independently to support the different departments of an organization. Other times, they may have teams that report to them, most often executive or senior vice presidents. In many cases, the CFO and COO both report to the CEO, along with other executives, such as chief information officers or chief administrative officers. COOs could have vice presidents in HR, sales, public policy that all support different operational functions in a business. CFOs might have vice presidents for finance, treasury, acquisitions and investments and compliance.

Accountability

If different roles, the CEO may report to the president of a company. Often elected by a board of directors for publicly traded companies, the board decides if the CEO is performing well. As many of the decisions come from the board of shareholders, they can choose a new CEO if they think someone else may be more fit to perform the needed duties. For COOs and CFOs reporting to the CEO, the CEO ensures accountability through regular meetings and often formal performance reviews.