It’s vital to address the issue of whether “founder” is a legal title before delving into the power dynamics between the CEO and founder. No, is the response. Simply put, “founder” is a phrase used to describe the individual or people who founded a business. It does not grant any obligations or rights under the law.
Returning to the power fight now. Because they are in charge of managing the company’s daily operations, CEOs frequently hold the most sway. They are the ones who manage personnel, make strategic choices, and present their findings to the board of directors. Additionally, the CEO often gets the last word on important choices like mergers and acquisitions.
The founder is not helpless just because the CEO has the most influence, though. Founders frequently exert a great degree of influence, particularly if they still own a sizable portion of the business. They might serve on the board of directors, have a say in important choices, or even participate in daily operations.
What transpires, though, if the CEO and founder aren’t on the same page? Can one fire a founder? Yes, but it’s not as straightforward as it might seem. If the company’s creator also works there, they can be fired just like any other employee. The founder cannot be fired, nevertheless, if they only own stock in the business and are not an employee. They are unable to be fired, but the board of directors has the power to remove them or reduce their ownership stake in the business.
The CEO and founder may hold different positions in some circumstances. The title “President,” which is often used interchangeably in businesses, is another title for the CEO. The person in charge of the board of directors may also be referred to as “Chairman” in certain circumstances.
In conclusion, the power relationship between the CEO and founder might change based on the particulars of the business. Although the CEO typically has the most sway, the founder can still have a considerable impact. Although “founder” is not a formal title, it is still a critical term to describe the individual or people who founded the business since it has a significant impact on the organization’s culture and decision-making procedures.