I have had the opportunity to talk to a number of different organizations and recruiters around the world over the past year. One of the countries I blogged about was Australia in the #globalrecruitment series. Mark Smith, Director of people2people and I have collaborated a number of times and both of us have found our conversations to be extremely helpful in learning about each others country. We have talked about the differences in agency recruiting and the differences in recruiting candidates in Australia and the USA. We have also talked about the resume format differences and job market differences. One area we also wanted to talk about was the differences in titles for executives. So, I asked Mark the question. What is the difference?
You are correct, Will, this series has been an excellent opportunity. Exploring the differences in the U.S. and Australian markets has certainly been a learning experience, none more so than the task I embarked on earlier today. Why are there different titles of C-Suite executives in different parts of the world? Let’s explore.
Before I go any further, I should also define C-Suite.
Investopedia – “C–Suite gets its name because top senior executives’ titles tend to start with the letter C, for chief, as in chief executive officer, chief operating officer and chief information officer. Also called “C-level executives.”
Wikipedia – “The highest-level executives in senior management usually have titles beginning with “chief” and are therefore usually called “C-level” or part of the “C-suite”. The traditional three such officers are chief executive officer (CEO), chief operations officer (COO), and chief financial officer (CFO)”
As someone who has watched a lot of U.S. television and hired several U.S. citizens at people2people, I have never really understood the difference between a CEO and a president. It is true that many titles overlap and are confused with C-Suite. One of these is President. In the U.S., state laws normally require certain positions to be created whenever a company is incorporated. These include President and Treasurer. These traditional titles are still very much used today, but in 24 U.S. States, the MBCA or Model Business Corporations Act has superseded the legal requirement and only makes the Board of Directors mandatory. The titles used are at its discretion.
It many circumstances, the CEO and President exist side by side or together. So an individual could be President and CEO. The CEO is often seen as a more important role. In Australia and the UK, you tend to find that the term President is rarely used. Instead you have a Managing Director, which is also synonymous with the CEO.
Similarly in Australia, you rarely see the term Vice President (VP) or Executive Vice President (EVP) used. In the U.S., the EVP positions normally report to the CEO or President, and sometimes these people have dual C- Suite titles, as well as EVP or senior Vice President.
All of this is very confusing, and, in my opinion, a title is a title is a title. As a recruiter, I would always obtain an understanding of reporting lines, rather than rely on a title alone. Will, what’s your understanding?
Agree 100%. This is a very interesting topic and I can see where you would find it confusing Mark. In the U.S., we do use the CEO and President title interchangeably at times. You will often see, as you mentioned, someone referred to as President & CEO within smaller organizations. I think in a quick answer, people call themselves what they want to be called. When you see big titles thrown around like President and Vice President within smaller companies it sometimes simply states who is in charge and who is in second in charge.
Within a larger organization you will typically have a CEO who is running the organization and you may have multiple Presidents who run different divisions in the organization. Underneath the Presidents, it is typical to have Vice Presidents who run smaller divisions that the President leads. The Vice Presidents are usually in charge of the Directors and report into the President. The Directors typically have managers underneath them. The managers manage the individual contributors. Clear as mud?
In my humble opinion, America is really hung up on titles. People who aren’t managing anybody are called managers, and Director titles are given to people that don’t deserve them at all. I believe some of this is due to the highly competitive job market. In order to keep good people, companies have to offer career advancement and organizations are to blame for these titles. Titles are a way of showing that individuals have progressed their career.
This can make recruitment very difficult. It is important to understand the reporting lines, not the titles alone.
We do not use the title Managing Director ever in the United States. I do, as you mentioned see it used frequently in the UK and other European countries.
So, I guess we do things backwards here Mark. Thanks again for a good chat. Until next time, Cheers.
Mark Smith is a foundingDirector at people2people. Commencing his career with Deloitte in the late 1980’s, Mark is a qualified Accountant. In 1994, he decided to make a career switch to the recruitment industry. During his early recruitment career with two listed recruitment entities, Mark recruited and managed teams in both temporary and permanent disciplines, in the Sydney, Brisbane and London markets. In February 2005, Mark established people2people with Manda Milling and Simon Gressier. Mark is a Certified Practising Accountant (CPA), a member of the Recruitment & Consulting Services Association (MRCSA) and a member of the Australian Institute of Company Directors (MAICD).