If you’ve worked at a large corporation or held a government position, you’ve encountered various leadership roles. Some of them are straightforward to understand, like the chief executive officer (CEO) and human resources manager roles. Others, however, like executive director and managing director, can be hard to distinguish.
While most people may use these roles interchangeably, it’s important to remember that they are different and serve different organizational functions. To understand how each position brings value to an organization, it’s crucial to know their actual job descriptions. In this article, we will:
- Help you understand the roles of a managing director
- Highlight the roles and responsibilities of an executive director
- Highlight how much each position pays
Share how to get started with OnBoard
What is a Managing Director?
A managing director is a senior executive who manages a company’s daily activities. This person frequently serves as the executive team’s leader and establishes the company’s general direction. The managing director creates and puts plans into action that expand the business and boost profitability.
Unlike a non-executive director, managing directors are responsible for building relationships with important stakeholders, overseeing budgets and expenditures, and luring and keeping the best talent. When necessary, they may travel great distances to meet business needs, serve as the company’s face, attend meetings, deliver presentations to conventions, and correspond with local leaders or the press.
Roles and Responsibilities
The managing director performs duties similar to those of a CEO. The person in this role manages the company’s assets, finds qualified candidates, and minimizes staff turnover. The managing director is expected to integrate human and financial resources to steer the business toward its primary objective.
In nonprofit organizations, the managing director could also act as the CEO. This implies that person will be in charge of creating the corporation’s annual business plan.
Other roles and responsibilities of a managing director include:
- Help resolve internal disputes
- Assign tasks to employees for department initiatives
- Foster a competitive mindset to satisfy business demand
- Engage with the public and customers
- Track the organization’s development
- Create strategic plans and offer board members support in the sector’s growth
- Ensure the appropriate policies are developed and adhere to any applicable laws
Pay and Notoriety
Generally, a managing director has more work experience than an executive director. A managing director normally has at least 10 years of expertise in relevant industries, including accounting, finance, or business leadership. A managing director’s total annual pay is expected to be $364,191, which includes bonuses and profit sharing. The average salary is $170,586.
Ensure effective, efficient meetings with our comprehensive Board Meeting Agenda Template.
What is an Executive Director?
An executive director is a top leader within an organization who is tasked with being a representative between the board of directors and senior leadership. In a nonprofit organization, this person may be referred to as a nonprofit executive director. The person in this role takes the initiative and develops business plans to advance the company toward financial stability.
Executive directors are autonomous decision-makers who act entirely on behalf of the company. They collaborate with the board of directors to formulate and carry out strategy, establish priorities, and make bylaws. Like managing directors, they are also in charge of the company’s daily operations.
They continually work to promote the company culture and inspire and develop their employees in crucial areas. Executive directors are also frequently responsible for fundraising and cultivating connections with important stakeholders.
Roles and Responsibilities
The executive director frequently communicates with the board of directors. Executive directors deliver director reports for the initiatives they’re involved in. However, it is not their role to offer advice to the board.
They will create and then oversee the policies and initiatives that direct the business toward its vision and goal. They also participate in most board meetings, updating the other members on the status of every venture within their purview. They respond to inquiries, offer information, and maintain constant communication channels with other critical personnel like nominee directors.
Other responsibilities of executive directors include:
- Make sure the business upholds its code of ethics.
- Create various rules and regulations to govern a company’s operations.
- Create and oversee guidelines and initiatives to achieve the organization’s goals.
- Stay up-to-date on market trends and apply them to the business when relevant.
- Supervise department managers.
- Assess and manage company budgets.
Pay and Notoriety
An executive director typically has five to seven years of expertise in corporate management, finance and accounting, and human resources. According to statistics, an executive director in the U.S. earns less than a managing director, at an estimated $227,446 total compensation a year, with an average salary of $126,831.
Getting Started With OnBoard
The responsibilities of an executive director and a managing director are distinct. A managing director often supervises the entire company and has more work experience and academic qualifications. On the other hand, an executive director runs the company’s daily operations and ensures that all actions help the organization achieve its objectives.
Whether your organization needs both or just one of them, it’s vital to implement a system that enhances communication and efficiency. OnBoard, a cloud-based board management tool, helps managing and executive directors operate more efficiently. The platform simplifies board meetings by automating the creation of meeting agendas, minutes, and notes.
OnBoard supports instant messaging and notifications through a centralized dashboard to foster board member teamwork. Additional features include:
- Industry-leading certifications and accreditations for security, compliance, and data protection
- Integration of secure chat and Zoom to improve communication
- Board evaluations to enable board members to assess their effectiveness
OnBoard provides a complete solution purpose-built to take your board to the next level. For an excellent starting point, download our free board meeting agenda template to see what OnBoard can do for your organization.
Ensure effective, efficient meetings with our comprehensive Board Meeting Agenda Template.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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