Updated July 31, 2023
Difference Between Executive Director vs Managing Director
The following article provides an outline for Executive Director vs Managing Director. Executive directors act as an intermediary between the company and the board; under their supervision company takes progressive action and attains the organization’s predefined goal. It plays a vital role in the organization, takes charge of the day-to-day activities, and puts in the best efforts for future endeavors while working with other boards of directors. Managing directors have the utmost responsibility of managing the resources and regulating the organization’s operations, which results in the company’s prosperity and profit. They maintain professionalism and don’t lose their patience even in a drastic situation to maintain a positive outlook. Managing directors are primarily in their offices, working 9 to 5.
Executive Director
This works proactively and designs better strategies to advance the company, which helps make it financially stable and forward. Executive directors are solely responsible bodies who make their own decisions independently in favor of the organization without the consent of the board’s chairman. Nevertheless, they also motivate their subordinates in critical affairs. And continuously put efforts into developing their subordinates and promoting the company’s philosophy.
The job responsibilities of the executive director comprise of:
- Investigate the company’s operation and upgrade the system to enhance productivity.
- Maintain the ethic from top to bottom of the business chain.
- Estimate the operational amount required and maintain a surplus to meet the unexpected demand.
- Keep updated on market trends and what proximate changes are required to meet the demand.
- Supervising department managers and quality reviews.
- Align different opinions and shape them into a strong plan.
- Ensure that the company adheres to ethical practices.
- Formulate different sets of policies to run an organization and adhere to it.
- They are managing their direct reports with hire/fire capabilities.
- Develop, then manage policies and programs to obtain the company’s mission.
Managing Director
Managing directors fuel businesses through years of experience and leadership, which helps systematize the workflow, manage budgets, and regulate expenses. More occasionally, being the face of the company, they travel far to meet the business need, attend meetings or give speeches to other boards, regional executives, or the media. The manager is also responsible for research and development programs that will help cater to new businesses with new technology.
Managing Directors involve themselves as such:
- Directing company resources.
- Insist coworkers and subordinates and mediate into issues.
- Assign responsibilities to individuals for department projects.
- Maintaining a competitive outlook to meet business needs.
- Interacting with clients and the public.
- Ensure the selection and retention of the right person.
- Monitor the company’s progress by making corporate and business plans.
- Design strategic plans and assistance to members of the board in the development of the industry.
- Ensure the right policies that comply with relevant regulations are created.
Head To Head Comparison Between Executive Director vs Managing Director (Infographics)
Below is the top 7 difference between Executive Director vs Managing Director:
Key Differences Between Executive Director vs Managing Director
Executive Director vs Managing Director is the organization’s topmost and most important position. Let us discuss some major differences between the Executive Director and Managing Director.
- The executive director plays a key role in decision-making and has a right to interfere in daily activities. While the Managing Director is the most senior role in the organization, they control and direct its work.
- The Executive Directors are more likely to respond to design, develop and implement the strategic plan, and monitor the organization’s ongoing activities. While Managing Director’s major concern towards the implementation of company policy.
- Executive Directors act as a figurehead and are answerable to top managers regarding the success and failure of the organization. Managing Directors ensure the business performance of heads and conduct meetings for improvement.
- The Executive Director ranks below the managing directors. If the MD or CEO is unavailable in the organization, then the executive director reserves the right to decide in favor of the organization.
Executive Director vs Managing Director Comparison Table
| Basis of Comparison |
Executive Director |
Managing Director |
| Definition | A full-time employee has a specified decision-making role as a director in any field of business, such as finance, marketing, operations, etc., on an ongoing basis. | The Managing Director is the most challenging and senior role in the organization. They report to the company’s board of directors and shareholders with many responsibilities. |
| Responsibilities | Design, develop, implement strategic plans, and monitor the organization’s operations. | Primary: Responsible for implementing company policy and any changes to it.
Secondary: Responsible for representing the company in a public event and mentoring the Board of Directors. |
| Workload | Act as figureheads and answerable to all the top managers and ultimately responsible for the organization’s success or failure and operation. | Ensure business performance heads in a positive direction. Demanding and highly pressurized role in conducting meetings with other departments. |
| Benefits | Apart from base salary. They are offered bonuses, incentives such as stock options, income protection, a guaranteed severance package, and a signing bonus & perquisites. | Significant remuneration makes a difference in salary and bonuses, company shares, and many more. |
| Challenges | Abundance challenges in management, fundraising, strategizing, innovation, and implementation. Juggle among them lead to the success or failure of an executive director. | High-pressure and result-oriented role. Pressure due to the detrimental cost of work-life balance with tight deadlines. |
| Ranking | Lower than managing director. | Highest ranking executive. |
| Reporting | The executive director makes their decision own without any consent of the Board of Directors in the organization’s development. | The managing Director has to listen to the board of directors’ advice and work for the shareholder’s interest. |
Conclusion
Executive Directors vs Managing directors are both challenging roles, and sometimes, it is used interchangeably. Managing directors represent the company’s philosophy in public and recruiting, training, terminating, and delegating employees. However, Executive directors are answerable to the board of directors, join the meetings, listen to their views, and decide the best move for the company.
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