Confusing the roles of a managing director and CEO is fairly common as many people do not understand the difference between these roles. We take a closer look at the key differences and similarities of the roles here, as well as who is generally held accountable for what within an organization.
Both of these roles are responsible for the smooth functioning of an organization, and they achieve this through specific tasks assigned to each. However, we also need to remember that not every company has both a CEO and a managing director. Who takes care of the company’s daily operations? Who ensures that company goals are met? Is either of these the same as the company’s founder? Does it matter what directorial boards a company belongs to? What happens when both of these roles do not exist in the same company? We endeavor to answer some of these burning questions below.
The answer to this question really depends on the company. Some businesses do not have a managing director and a CEO, rather opting for only one of the two positions. When both positions do exist in a company, the CEO position usually outranks the managing director. But this is not always the case. In many cases, the founder of the company takes the role of the managing director, who is responsible for the overall management of different divisions within the business.
To understand further we need to take a closer look at the responsibilities of a CEO vs managing director.
The Chief Executive Officer in a company is responsible for the financial operations and strategic direction that the business takes. They tend not to be deeply involved with day-to-day operations but provide a liaison between the company and the board of directors.
On the other hand, daily operations of a company are usually the responsibility of a managing director. The managing director works with different parts of the company to ensure that strategic direction is kept and objectives are achieved.
While the differences between a managing director and a CEO are becoming clearer, there are various things that they have in common. It can be helpful to also explore these for a more complete picture.
One of the biggest similarities between a CEO vs. managing director is that salaries tend to be similar. However, taking on such a job for the money is not the best idea. It is an extremely difficult level of work to complete and takes a certain kind of dedication and drive to do well. Doing either job poorly will have serious consequences for an entire company and will impact the lives of many people who work for the company.
In some companies, a CEO and managing director may be the same person, as not all companies will have both roles. Some of the skills that these roles share may be:
For someone to truly be successful in these roles, they will likely need an open mind and the interest and capacity to learn the required skills.
When embarking on a professional career, many will endeavor to someday reach the top tier. Throughout such a career, you might play several roles within an organization and as you climb the corporate ladder you may begin to wonder what kind of executive role you are best suited to.
A good place to begin when evaluating your own skillset and deciding where you belong in the executive team, is to list your skills, strengths, and weaknesses.
In the broadest sense, visionaries and people who enjoy strategy make a better CEO, whereas people who like business operations and implementing strategy do better as a managing director. While this forms the foundation, there will be a long list of skills that you build throughout your career to prepare you for executive leadership. This is the kind of experience that you can only learn from filling different roles in various organizations throughout your career.
Furthermore, no matter what industry you are in, having a Masters in Business Administration adds strong foundational strength to the success of an executive management role like CEO or managing director. This also opens doors to other roles like Chief Operating Officer or Vice President.
This might depend on the company, but generally speaking, a CEO usually ranks higher than managing directors.
There is no set list of experiences that you might need to take on the role of a CEO or MD. It would depend on the duties assigned to the role by a specific company. Any kind of experience that you gain throughout your career can be beneficial to developing a CV suited to a CEO or managing director role.
Yes, a CEO usually reports to the board of directors and works closely with them in developing company interests.
No, a managing director is usually not a member of the board of directors and often reports to the CEO who works right under the board of directors.
Neither of these roles is directly involved with a company’s day-to-day operations. This is usually taken care of by lower-level management. However, these lower-level managers work closely with the managing director.
Workplace incident reports form part of health and safety fundamentals in a