Quora Answer: Should Startups Hire Both a Chairman & a Chief Executive Officer?

The following is my answer to a Quora question: “Should startups hire both a chairman and a chief executive officer?” 

Putting aside all these fancy titles, what are their roles?  A chairman or president of the board is responsible for overseeing the strategic direction of the business.  In terms of managing the board itself, he is responsible for corporate governance, controlling the meeting, addressing long-term shareholder and investor concerns, and mentoring the managing director or chief executive officer. 

The chief executive officer, on the other hand, is directly responsible for the immediate goals of the business, and manages the executive team.  He gives the direction to meet milestones to achieve board targets, and he deals with major customers.  His concern is quarterly and annually.  Different companies may have slightly different titles for chairman and chief executive officer, but their roles do not vary much.  Neither of these roles come cheap. 

For a startup to be able to afford both means that they have managed to secure sufficient funding to start generating their own revenue, and that revenue is significant enough that they can justify the cost of either, let alone both.  This is at a period when the business has started to scale, and preliminary preparations are made for a major exit, such as a listing or SPAC merger.  This also means that the scope of work has expanded, or the funding secured is so large, to the extent that the role of chairman of the board and chief executive officer has to be split for better corporate governance.  If your startup is no where near this, there is no basis to justify such a major hire.