The CEO is hired or appointed by the board of directors as the top-most position in the corporate hierarchy at any company. They report only to the board and no one else.
The COO is second in command to the CEO and works very closely with them. They are also hired by the CEO.
The CFO is hired by the CEO and works one-level under them along with the COO and other C-suite positions.
Liaising
The CEO is responsible for the public image of the company so they represent the company in the media. In some instances the CEO also liaises with the investors, shareholders, and official bodies.
The COO will usually carry out any communication required by the CEO. They are usually in charge of the internal affairs of the company.
The CFO’s liaising is only finance related. They are incharge of developing and maintaining relationships with investors, banks, and other financial institutions. Depending on the needs of the company, some CFOs also liaise with the board.
Functional role
The CEO’s job is to develop goals and strategies for the growth of the company. These are usually with the knowledge of the board. These goals then get delegated to the appropriate manager in-charge. The CEO ensures that the employees are working towards the vision of the company. The CEO is the position that proves as an example for the rest of the company to follow.
The COO’s function in the company is reliant on the CEO and company’s needs. But typically the COO is responsible for daily operations at a company. Since the COO’s duties depend on the organization, there is no definite outline of their functional role but it may include culture, marketing, sales, strategy, research, and resources.
The CFO is solely concerned with the financial growth and progress of the company. They keep track of the financial strengths and weaknesses of the company and propose plans to combat the weaknesses and play up the growth. They also have to be aware of unforeseen challenges such as an unstable economy. They are expected to provide counsel in financial matters concerning investments, projects, and strategies, to the CEO, COO, and board of directors.
Culture
The CEO acts as the role model for company culture. Once the culture is established, the CEO needs to carry it through and maintain it in every situation. The entire organization will use the CEO’s behavior as an example to define their own. In situations where the CEO needs to take a stand and show integrity and the personality of the organization is extremely important.
The COO’s relationship with the organizational culture is interesting. In companies where they are required to develop and establish the culture their role is on the enforcer (without actually forcing anyone). They are tasked with ensuring the company culture is understood, accepted, and followed by everyone in the company. In companies where the culture is not part of their primary responsibilities, the COO is like any other leader and is expected to uphold the culture and be an example for the rest of the employees.
The CFO’s relationship with the company’s culture is the same as any other leader. They must uphold and follow through with the requirements and prove to be an example for their department to follow. They are expected to lead by example, as are the other members of the C-suite.
Challenges
CEOs are faced with all the tough decisions to be made in an organization. There is a tremendous amount of pressure on a CEO to take the difficult call, make the right decisions, be the leader the company needs, and take the company to success. But they also face the added pressure of being compared to their predecessor. Another challenge CEOs face depends on whether they are internally appointed or hired from outside. Someone hired from outside the company generally receives more help with the transition into their role. While, someone hired internally is expected to already have the required information. While this might sound logical, it might not extend to all aspects of being a CEO.
The challenges faced by a COO are varied since there is no one role the COO must fulfill. The nature of the role is dependent on the company’s and the CEO’s needs. This means they need to be well-versed in a number of subjects and skills that might be tasked to them. The challenge COOs face is that they must be able to adapt to what is required of them. This is why a COO needs to be extremely flexible and have a wide area of knowledge, skills, and expertise.
The CFO has the enormous responsibility of managing the financial well-being of the entire company. They need to be extremely skilled in their area of expertise. Theirs is the kind of job that cannot afford any mistakes. But their challenge extends beyond the company itself. They also need to be well-informed and well-prepared to deal with any uncertainty that the economy might bring. While this is not in their control, they are required to predict and prepare for economy related challenges. This requires them to be well-versed with trends and ups and downs in the market and the economy.
CEO vs COO vs CFO salary
The salaries of executives in the C-suite are highly dependent on factors such as the size of the company, their own experience, the industry, the kind of company, etc.
According to an Indeed report from March, 2022, the average base CEO salary is $104,494 per year in the US. While the average base COO salary is $113,301 per year. And, the average base CFO salary is $122,101 per year.
According to PayScale, in a report from March, 2022 the average base CEO salary in India is ₹2,902,892 per year. While the average base COO salary in India is ₹2,881,769 per year. And, the average base CFO salary in India is ₹3,490,229 per year.
The roles of the CEO, COO, and CFO are all part of the C-suite but hold very different roles and purposes in an organization. Their responsibilities are different but they are all required to be leaders for the employees in the company.
