CEO vs Managing Director – What Are The Key Differences?

When assessing the leadership requirements of your organisation, it pays to understand the key differences between the two most senior positions in a company. Knowing these differences will ultimately help you to get a clear idea for the role you are aiming to fill, and the candidate you are seeking to hire.

Thinking you need a Managing Director when in fact a CEO is more closely matched to the role you require is a mistake that you’ll regret in the long run, not to mention, cost you twice in recruitment costs when you do finally pivot and start the hiring process all over again.

In this post we’ll walk you through the key differences of a CEO vs Managing Director.

Fundamentally, a CEO is not in charge of the company’s daily operations. They are considerably more involved in devising the company’s strategy and vision. A Managing Director engages in the day-to-day operations of the business and is usually much more accessible and involved with internal team liaisons and support. The company’s board of directors receives performance reports from the CEO first-hand. Whereas, the Managing Director, follows through on the CEO’s instructions, which the CEO later evaluates and reports on.

The CEO is not answerable to the company’s shareholders. Instead, a CEO frequently serves as a company’s spokesperson, leader, or change agent within the firm. A Managing Director, on the other hand, does report to the company’s shareholders but usually lacks the authority to sign cheques or share certificates.

Any clearer? OK, we’ll dive a little deeper.

The Responsibilities of a CEO

A CEO’s duties include increasing share price, market price, revenues, or other financial factors. The Chief Executive Officer (CEO) of a non-profit or government organisation often works towards attaining the organisation’s short and long-term goals, such as lowering poverty levels and raising literacy rates. The President, Deputy Chief Executive, CFO, COO and Managing Director are under the CEO’s guidance and supervision. Therefore, it is common practice to state that the Chief Executive Officer, or CEO, serves directly under the Board of Directors.

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. A Chief Executive Officer, or CEO, is typically responsible for making decisions, formulating strategies, and other important policy sign-offs in addition to managing or carrying out other critical tasks. The CEO inspires employees and promotes change as the company’s ultimate leading executive and figurehead.

The Chief Executive Officer is in charge of, but not involved in the company’s daily operations. They are however responsible for all important business decisions, including those pertaining to the company’s operations, processes, marketing, business development, finances, and human resources.

The Responsibilities of a Managing Director

A Managing Director is in charge of the company’s daily operations, structure, or corporate division. There are four different ways to choose or appoint a Managing Director. One method is that a Managing Director can be selected by a resolution passed at a general meeting. Second, they might be chosen by a company’s association. Thirdly, a Managing Director is chosen by the Board of Directors. And the fourth way is by way of an agreement with a company.

The Managing Director has substantial powers to manage the company’s affairs. However, key administrative and financial actions like signing cheques or assigning stock certificates are not included.

A Managing Director is directly in charge of overseeing an organisation’s daily operations and reports to the CEO on any developments and necessary escalations. The heads of departments and general management report to the Managing Director, and the Managing Director aids the overall management in the smooth functioning of other divisions.

Let’s look at the head-to-head differences between the CEO and Managing Director:

BasisChief Executive OfficerManaging Director
Position in the company  structureA CEO sits under the Board of Directors in the company structure.A Managing Director comes under the authority of the CEO.
ResponsibilityA Chief Executive Officer is not responsible for the organisation’s day-to-day operations.A Managing Director is responsible for the daily business of the organisation.
FunctionsA CEO facilitates trade and has his/her strategic vision, which helps align internally and externally.A Managing Director assists in the overall management of the company.
AccountabilityA CEO is not accountable to the organisation’s shareholders or company’s actions.Managing Directors are responsible for the company’s activities and are also liable to the company’s shareholders.
Delegation of authorityA CEO reports to the Board of Directors.The Managing Director takes orders and reports to the CEO.


The terms CEO and Managing Director refer to different positions. 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.

Further Reading: Understanding the Roles and Responsibilities of a CEO