Wednesday, April 24, 2024
HomeBusinessManaging Director vs CEO: Understanding the Key Differences in Leadership Roles

Managing Director vs CEO: Understanding the Key Differences in Leadership Roles

Making the leap to management is a goal for many career professionals who set their sights on ‘becoming a manager’ without giving too much thought to what their dream job title will be, exactly.

The whole world at the top of any business, containing within it the mysteries of the C-Suite, ‘executives’, answering to ‘the board’, and other such phrases, is covered by that desirable word: management. But what is the precise difference between a managing director and a CEO? Let’s take a look.

Who’s Top Dog?

Who's Top Dog? 

In businesses where you have both a CEO and a managing director, the CEO is almost always the person with senior rank. Often, these positions are found in companies where several business units are held under a wide portfolio: a managing director will be the head executive of one business unit, while the CEO will be responsible for managing the overall group of business units – he will be in charge of the portfolio, you can say.

What Does a Managing Director Do? 

A managing director job description is usually a hefty document: they are very hands-on. They will usually be expected to be at work every day, moving between branches and co-ordinating with branch managers, overseeing projects, and often, signing off on payroll and purchases (although this latter can sometimes fall to lower-level managers).

Managing directors have a decent amount of authority and can usually hire and fire employees when necessary, permit time off (or not), and exercise his or her own initiative up to a pre-determined point. After that point, the MD will have to ask for permission or – at the least – clear their activities with executives higher up the company ladder.

What Does a CEO Do?

What Does a CEO Do?

The CEO – Chief Executive Officer – of a business is usually a very high-powered individual who has a great deal of freedom to run the company his or her way. CEOs often are answerable only to the board (and if the company has never sold shares or gone public in any way, the CEO is only answerable to the owner – and may even be the owner) who tend to be content as long as the company or group is running well, not breaking any laws and ensuring a solid and sustainable profit.

The CEO must come up with a vision for the company, and must be able to see the big picture as well as have a touch of prescience, being able to tell what will happen in the future.

For example, a car maker who spotted the growing green trend early on and began to invest profits in research and development of environmentally friendly cars like hybrids and fully electric vehicles, would be currently breathing a sigh of relief at jumping in the right direction, while those who doubled down on the hopes that new immense oil-fields would be found are perhaps sweating a little more nervously!

So we can see that while Managing Director and CEO are very different positions, with CEO being a more prestigious job title, both are desirable jobs for anyone anxious to move up the employment ladder to a leadership role.

More from MoneyVisual

Recent Posts

Most Popular

Educational Topics