Managing Director vs. CEO: What’s the Difference? (Explained) (2024)

The difference between a managing director and a chief executive officer (CEO) is subtle but crucial. The managing director is usually more closely involved with day-to-day operations, while the CEO’s role is to lead the organization, set the vision, and provide overall direction.

In larger corporations, a managing director manages and leads one specific business unit, while the CEO oversees all business operations across multiple divisions. Some organizations also have an executive director who shares many of the same responsibilities as a CEO.

A managing director is usually appointed by a board of directors and reports to the CEO or senior executives. Read on to learn more about the roles of managing director vs. CEO.

A managing director is an executive responsible for overseeing the day-to-day operations of a business, managing personnel, and carrying out other human resources duties, and ensuring the organization meets its goals. In some cases, they may also preside over meetings, especially in the absence of the board chair.

Typically, a director reports to the board of directors or the chief executive officer. But you should note that there’s a difference between an executive and a non-executive director. The former is actively involved in managing the business, while the latter is more of a passive advisor.

Roles and Responsibilities

The managing director’s primary responsibilities include:

• Overseeing operations such as sales, marketing, customer service, production, and finance
• Developing corporate strategies to meet short-term and long-term goals
• Managing personnel and ensuring adherence to the organization’s HR policies
• Overseeing communication with stakeholders, including investors, customers, suppliers, etc.
• Monitoring the organization’s financial performance and budgeting, and reporting to appropriate stakeholders
• Representing the organization at public events or initiatives

Pay and Notoriety

The pay for managing directors varies depending on various factors, including their assigned responsibilities, the size and industry of the organization, and their experience. For instance, a nonprofit executive director salary range typically falls between $70,150 and $101,609. On the other hand, a nominee director — appointed by a board to step in and serve on behalf of another director — may not be compensated at all.

The notoriety associated with being a managing director is usually less than that of a CEO. However, they can still garner public recognition for their organizational performance. For instance, a managing director might be featured in newspapers and magazines for successfully implementing a specific project or strategy.

The CEO is the highest-ranking executive in a company and is responsible for setting the organization’s vision, strategy, and overall direction. They typically hold ultimate authority over all operations within their corporation and are ultimately accountable for its financial performance. In some cases, the CEO may also act as the chairperson of the board of directors or preside over meetings.

Roles and Responsibilities

The chief executive officer’s primary responsibilities include:

• Developing and implementing strategies to meet the organization’s short-term and long-term goals
• Overseeing communication with stakeholders and taking part in public events or initiatives
• Coordinating with the board of directors and other executive members to ensure the organization’s success
• Managing the organization’s financial performance, including budgeting and reporting
• Setting standards for organizational performance and holding senior executives accountable for meeting them

Pay and Notoriety

The pay for chief executive officers varies depending on the size and industry of the organization. The salary range typically falls between $622,256 and $1,060,744. They also often receive bonuses, stock options, and other benefits.

The notoriety associated with being a CEO can be both positive and negative. A successful CEO will often attract media attention and public recognition, while a struggling CEO will be criticized and scrutinized. Moreover, a CEO’s actions can significantly impact the company’s reputation and public perception.

Comparing the roles and responsibilities of the managing director vs. CEO, it’s worth noting that these two positions complement each other. A CEO can’t manage the company successfully without a great managing director to help them make decisions and keep operations running smoothly. Both directors and executives can benefit from tech-driven tools, including board management software like OnBoard, to streamline tasks and increase overall productivity.

OnBoard is an excellent board management tool for streamlining boardroom operations and ensuring all directors are informed and up-to-date on company activities. It provides an efficient way to store documents and share information securely with all directors. Additionally, it allows users to manage online voting processes easily and quickly. With OnBoard, managing directors can better coordinate their activities with other executives and ensure everyone is on the same page.

OnBoard features and capabilities include:

• Videoconferencing integrations
• Secure messenger
• Drag-and-drop agenda and minutes builders
• Meeting analytics
• Task management

With tools like OnBoard, directors and executives can streamline operations and maximize productivity more effectively. For an excellent starting point, download our free board meeting agenda template to see what OnBoard can do for your organization.