The smaller the company, the fewer written-down requirements there are for someone to be president. As companies grow, the job becomes more formalized, with more skills and experience needed. Regardless of the size of a business, presidents at most companies have many of the same responsibilities, including team building, strategic development and fiscal management.
Small vs. Large Companies
At small businesses, the president is usually the owner. Working with a small staff, the president is very hands-on, overseeing virtually every function, including product development, finance, human resources, marketing and production. The president has expert knowledge of the company’s product or service, often having created or invented it. This allows the president to book large orders as a quasi-salesman, working with large industry players. If the president doesn’t have expertise in a particular area, he will outsource work on a project basis until he can afford to hire a full-time person to do the work. The president usually has ultimate legal responsibility for everything that goes on at the company, making most of the final decisions with input from key staff. At larger companies, the president, often called a chief operating officer, might have limited product knowledge, but is expert at building management teams, setting financial strategies and monitoring the performance of the company’s various departments. The president often has no direct responsibility, such as marketing, finance or sales, but instead manages others who are responsible for that work. At both large and small companies, the president is often the public face of the business.
One of the key responsibilities of a president is the creation of the organizational structure, hiring the best people available to perform the important management functions. As smaller companies grow, the president hires department heads, delegating specific work to each new manager. At larger companies, the president works with a human resources staff to set the parameters for key hires, but letting HR recruit and hire employees. The president meets with executive management staff on a daily basis to discuss strategy, review performance, solve problems and ensure that all departments are working together.
A company president creates the long-term strategies for the business, rather than the tactics used to achieve them. For example, the president might determine the company needs to diversify its product line to decrease its dependence on one product or to help increase income exponentially if the company is mature and can only achieve incremental growth. The president would work with marketing to identify ways to do this and then assign the task of researching and executing the final plans to marketing specialists. Another common strategic duty of presidents is financial goal-setting, such as reducing debt or setting revenue or profitability targets.
A president monitors the business’s finances and makes decisions regarding the company’s spending, debt service, investment strategies, stock issues and profits. At smaller companies, the president might work with accounting and production to lower overhead and manufacturing costs to increase profit margins. He might work with marketing and sales to look at product modifications or new distribution methods to increase sales. The president approves the annual budget, monitors financial reports such as balance sheets, cash flow statements, profit-and-loss statements and departmental budgets. The president reviews year-end results, tax filings and annual reports, if the company is public. The president of a public company reports to a board of directors, working with them on stock issues, such as whether to pay a dividend, or issue, buy back or split shares.