CEO vs Managing Director Top 5 Differences

A managing director may hold shares in a company, be an owner or neither. When deciding which role is right for you, consider whether you want to be responsible for a team or unit, or for the company itself. While some people will thrive in a CEO role, others may prefer working at an operational level. Despite the differences between a CEO and a managing director, there are several skills or capabilities that are consistent across both roles. When considering the managing director vs. CEO positions, the two roles are similar to partners rather than a boss and a subordinate. Another important attribute of a Managing Director is their ability to implement and execute strategies.

Functional Roles of CEO and Managing Director

CEOs and managing directors are both leading authorities and decision-makers within a company. If you hope to pursue one of these positions, it’s important to understand the differences between them. Neither of these roles is directly involved with a company’s day-to-day operations. However, these lower-level managers work closely with the managing director. The Chief Executive Officer (CEO) in a company is responsible for the financial operations and strategic direction that the business takes.

MDs are responsible for implementing the strategy and policies decided upon by the board and the CEO. Their role is critical in ensuring operational targets are met and overseeing the execution of company strategy. Whether you’re wondering if a CEO or managing director is higher or whether you’re aiming for the top job, we explain the similarities ceo vs managing director and differences between the roles. Boards can expect managing directors to have a hands-on approach to all aspects of the nonprofit’s operations. They must have a deep understanding of the industry, market trends, and competitive landscape.

Managing directors often outline and assess different metrics to measure the progress toward each benchmark. 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. 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. Instead, a CEO often acts as a leader or a communicator for the company and implements change within the organization. On the other hand, a managing director is accountable to the company’s shareholders, but he does not have the substantial authority to sign cheques or share certificates.

They sign off on budgets, appoint executives and key managers, and deploy resources and capital. They will also plan company expansion or development and make decisions about which new products or services to develop. A CEO will come up with strategies to help achieve the company’s aims, but they will usually leave it to other executives and managers to carry out these plans.

Duke General Management Program (GMP)

If you’re a big-picture thinker with a talent for business strategy and the ability to influence and inspire, a role like CEO may be ideal. But if you’re a strong manager who can connect with and motivate teams, and identify efficiencies on a more granular level, an operational management role may be your calling. The responsibility for daily operations generally falls to the managing director of a business. A senior role in the organisation, the managing director works with different parts of the business to help them achieve their strategic objectives.

They work closely with the CEO and other executives to translate the company’s vision into actionable plans. MDs monitor progress, identify bottlenecks, and make necessary adjustments to ensure that strategic objectives are met. The managing director is responsible for operational performance and resolving any issues that arise in this area. They’re accountable to the CEO, who can assess their performance and make changes if needed. Here are three areas that illustrate the differences between CEOs and managing directors. Like other leadership positions, the ability to communicate expectations and delegate tasks is also essential.

You will also become an integral part of the global MIT Professional Education network and will be considered an alumni of TLP as well as MIT Professional Education. So, a CEO’s role might or might not be higher than that of a Managing Director’s. It depends largely on the company’s corporate and hierarchical structure. A founder typically holds a significant ownership stake in their company. They may choose to gradually sell equity or have their equity diluted through funding rounds.

The daily duties of a managing director can include the following:

They tend not to be deeply involved with day-to-day operations but provide a liaison between the company and the board of directors. The Chicago Booth ADP is a rigorous learning journey across 8 modules spread over 9 months and gives you access to the latest management thinking and tools. It is taught by an award-winning faculty at the Chicago Booth School of Business and accomplished senior business leaders. It creates an amazing opportunity to build a strong personal brand and competitively position yourself and your organization.

UCLA General Management Program (UCLA GMP)

They also rank higher than the vice president and many times, the Managing Director. They only report to the board of directors and the chairperson of the board of directors. But this considerable power does not include administrational acts like the signing of cheques or share certificates. A CEO typically makes money through a combination of salary and stock, and the same is generally true for founders while they remain involved in the company. Even if they give up their hands-on work in the business, most founders hold more stock in their company than any other individual.

• An MBA can help to propel your career in the direction you want to take it.
• A chief executive officer (CEO) is the highest-ranking executive within a company.
• These are all things that can influence if a managing director, CEO or other role is the right fit for you.
• After completing Technology Leadership Program, you will be part of a cohort of global leaders and practitioners.

There are a few areas that CEOs and managing directors have similarities. There are instances where the titles of CEO and Managing Director belong with the same person. This usually happens when the CEO is also the founder of the company. While this is not uncommon, it is usually preferred that the roles are held by different people so that the power and authority that comes with them are distributed.

The Chief Executive Officer presides over the company’s day-to-day operations as a manager. In a formal corporate structure, a CEO outranks a founder in terms of operational control. Boards of directors control corporations, and the board—not a single founder—hires the CEO to run the business.

• The two positions that people generally work towards are Managing Director (MD) and Chief Executive Officer (CEO) titles.
• A CEO may have a vision for what the organization’s culture should look like and what the organization’s mission and values are.
• This depends largely on the structure and requirements of a company.
• Overall, a CEO and the board craft a nonprofit’s strategy according to the organization’s mission and vision.
• They have a deep understanding of the company’s operations, processes, and systems.
• The CEO controls the President, Chief Executive, CEE, and Managing Director.

If you’re great at managing teams and the day-to-day operations of a company, a managing director role may be a good next step for you, and more suitable than being a CEO. A managing director is a senior role, responsible for daily operations and directing the company’s resources and people, as well as approaches. Understanding what they do and their different roles in the success of a company is important when it comes to choosing the right role for you. A CEO is a visionary leader, steering the direction of a company, while a managing director is more hands-on in running a company’s operations. Both are critical roles with a high level of responsibility that ultimately determine an organisation’s success.

Similarities between a CEO and managing director

They are responsible for hiring, training, and developing employees, ensuring that the organization has the right talent to achieve its goals. MDs also foster a positive work culture and promote employee engagement and productivity. Multinational companies may prefer managing directors with an international business background.