Difference Between Executive Director and Managing Director

Executive Director vs Managing Director

Those who work in a large organization or are aware of structuring of posts in an organization know about various types of directors. Usually directors are known by what they do rather than their job title and there are scores of directors in any large organization. There are Director (planning), Director (personnel), Director (finance) and so on. Directors are classified as executive and non executive in most organizations. Managing Director is a post that signifies the highest ranking officer in an organization. This article tries to differentiate between the two posts, Executive Director and Managing Director that are commonly found in organizations these days.

A Managing Director is undoubtedly the highest ranking officer and is a link between the administration and the board of directors. He is the ship of the captain who has to take vital decisions at crucial times. He has many roles to play and is usually involved with day to day operations of the organization. Ultimately, though he has to listen to the advice of the board of directors as they work for the interests of the shareholders.

Executive Director (not generic ones) have clearly demarcated roles and responsibilities, and if, in an organization, there are both MD and ED it is MD who holds the reigns of the organization with specified role for the Executive Director. An MD is above an ED and can fire him from his job.

In some organizations where there is no MD or CEO, the executive director is the boss and the head of all employees. There remains confusion in the minds of inclusion of both words executive as well as director in the title. It has to be understood that the executive director has nothing to do with the board of directors and is more of a CEO or chief executive of an organization. In fact, ED reports to the board of directors on a daily basis.

What is the difference between Executive Director and Managing Director?

• In commonwealth countries and some others in Europe, it is the title of Managing Director that refers to the highest ranking officer of an organization. This is a post equivalent to the CEO of a company in the US

• Executive Director is a post that is not very common, but when there is one along with MD, he is the junior of the two and MD can fire an executive director.

• In the absence of a CEO or MD, it is executive director who is the head executive of a company and is directly involved with day to day operations.