Their involvement in day-to-day operations may decrease as the company grows. Ultimately, the CEO is one of the biggest decision-makers within a company. But Managing Directors must also make important decisions on a regular basis.

So, we can safely say that the Chief Executive Officer or the CEO comes into play directly under the Board of Directors of an organization. A CEO may or may not own shares in the company, depending on their compensation package. However, it’s typical for CEOs to get stock options or equity incentives as part of their pay. This gives them a more vested interest in seeing the value of those shares grow. Overall, founders often have greater ownership and long-term financial interest, while CEOs may hold less equity but can receive performance-based incentives.

  • Stay on top of all the latest updates on global perspectives, industry research, business practices, and more to push your career forward and grow your company.
  • As smaller businesses expand, they require different skills and strategies.
  • Furthermore, Managing Directors play a crucial role in building and managing teams.
  • Although these two terms can be confusing when it comes to one’s roles and responsibilities, there are distinctive differences between the two.
  • They are responsible for hiring, training, and developing employees, ensuring that the organization has the right talent to achieve its goals.

Financial stake

By working out what drives you, can you make an informed decision about which role is right for you. An MBA can help to propel your career in the direction you want to take it. From building valuable connections to developing a strong general management skill base, never underestimate the power of an MBA. Not to mention that MBA graduate salaries do typically trend higher across senior management positions. CEOs must have a clear vision of where the organization is and where it needs to go. As the highest-ranking manager, CEOs must be receptive to new ideas and be invested in the nonprofit’s culture, morale, public image, and profitability.

While both ceo vs managing director positions hold significant responsibilities and decision-making power, there are distinct differences in their attributes and areas of focus. In this article, we will explore the key characteristics of a CEO and a Managing Director, shedding light on their roles, responsibilities, and the skills required to excel in each position. In contrast, the managing directors focus on the more technical aspects of daily operations and fundamentals like budgeting and hiring. They’re responsible for carrying out the CEO’s plans at an operational level.

Function and Primary Focus

Not considering the C-suite, a managing director is the highest-ranking manager in the organization. A qualified managing director typically has many years of experience managing staff and operations. The person filling this role reports directly to the CEO and must fulfill the CEO’s orders and expectations. The Managing Director, also known as the MD, is responsible for overseeing the day-to-day operations of the company. They focus on executing the strategic plans set by the CEO and ensuring that the organization operates efficiently and effectively. According to the Bureau of Labor Statistics (BLS), chief executives like the CEO earn a median annual salary of $206,680.

Responsibilities of a founder

  • A founder typically holds a significant ownership stake in their company.
  • The managing director works with different parts of the company to ensure that strategic direction is kept and objectives are achieved.
  • As Sugardoh scaled to a multimillion-dollar brand, Aliyah stayed on as CEO to ensure that new hires would blend into the culture of a company she created in a single shared room.

A managing director is a higher position than an executive director. If the details of their job change, a managing director may become a CEO. Not every company will have a managing director, but they will have a CEO, so it may be a case of changing roles or duties. While similar, in that they oversee the performance of their company, there is a difference between a managing director and a CEO. Think of the CEO as being invested in the ‘big picture’, while the MD focuses on the individual areas that drive a company towards that wider vision.

NUS Accelerated Management Program (AMP)

When they do, the CEO position generally sits at the top of the hierarchy. But that can also depend on a number of factors in the organisational structure. They act as the chief strategist, developing long-term plans and mapping out a path to greater success.

They serve as the main point of communication between the board of directors and corporate operations, embodying the organisation’s vision in all aspects of business. James Cook University’s MBA will make you capable of making strategic decisions based on a holistic view of global trends and data-driven insights. The MBA by RMIT focuses on teaching students about innovation, design thinking and transformative business strategies. Victoria University positions its MBA students to develop financial, strategic and analytical skills required of senior business leaders. However, many firms have both CEOs and managing directors, and each has a distinct and well-defined role within the company.

Both are high-ranking executives; however, they have a number of key differences in their roles. Simply put, a managing director is typically responsible for a single business unit, while the CEO is accountable for the entire organization. The CEO is the top executive in an organization, responsible for setting the overall strategic direction and vision of the company. They are the face of the organization, representing it to stakeholders, investors, and the public. A CEO is typically appointed by the board of directors and reports directly to them. Within the corporate world, the roles of CEO (Chief Executive Officer) and Managing Director are often seen as the highest-ranking positions within a company.

A managing director’s daily tasks revolve around the efficient execution of plans and smooth business operations. Managing directors may oversee hiring, budgeting, resource allocation, and performance monitoring. They will often make operational changes to improve performance and efficiency or cut costs. 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.

The CEO inspires employees and promotes change as the company’s ultimate leading executive and figurehead. It’s important your career plan aligns with your ultimate professional goals. If an executive role is in your future, consider how you see yourself involved in a company’s operations. Do you envision shaping the overall direction of a company and being its public face? Or do you see yourself more instrumental in the specific ways a company achieves its objectives?

Career goals

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. The CEO’s role is more prominent and more common than the Managing Director’s role. As startups expand, they transition from small, close-knit teams to larger, more complex organizations. The founder/CEO, having been involved from the beginning, can effectively communicate the company’s culture and values to new employees. For example, Kloo Coffee co-founders Claudia Snoh and Mariella Cho built business acumen through a prolonged soft launch where they gathered immense amounts of data about customer preferences.

ADP actively engages you in a collaborative learning environment with accomplished peers in . You will build a global community of like-minded leaders and will become part of the Global ADP Network for life. It is an extensive general management program offered by the UCLA Anderson School of Management, one of the world’s top business schools. A Managing Director is, on the other hand, among the highest leaders at an organization and usually functions under the CEO. The Managing Director is responsible for the day-to-day functioning of the company.

In accordance with legal and regulatory requirements, a company’s board of directors hires the CEO, and they serve at the board’s pleasure and discretion. A chairman heads this board of directors and, in some cases, the same person can serve as CEO. According to the organisation’s legal structure, the Board of Directors assign the CEO’s duties and responsibilities. They may be formal delegations of authority that are far reaching and have broad repercussions.

But some locations may refer to the same place in the organisational structure since these two positions exist within the same company but have other functions and responsibilities. Their roles and responsibilities depend on the company’s setup and the industry to which the company resides. Your strengths, skills and experience are important things to consider when choosing which leadership role might be right for you.