What is a Managing Director? (Overview, Roles, and Responsibilities)

  • By: Josh Palmer
  • July 19, 2023
Managing Director
Reading Time: 3 minutes

At the top of an org chart, reporting to the CEO, is a managing director. As a leader within the organization, the managing director sits on the board of directors. Corporations typically employ a managing director, while nonprofits may appoint an executive director to lead their day-to-day operations.

Read on to learn more about the roles and responsibilities of a managing director.

What is a Managing Director?

A managing director is a high-level executive responsible for leading and overseeing the overall operations and business strategy of an organization. Managing directors wield significant decision-making authority, serving as the bridge between the company’s board of directors, shareholders, and the executive team.

Managing Director Roles and Responsibilities

Collaborating with the board and taking orders typically from the chief executive officer (CEO), the managing director is responsible for turning the board’s vision into reality. This means they:

  • Control and allocate company resources at a high/broad level
  • Keep the board of directors updated on operations and activities so they can make the right strategic decisions
  • Collaborate with the board of directors, including nonprofit executive directors and non-executive directors
  • Oversee the development of the company
  • Recruit employees and assist in human resources activities
  • Support a strong company culture, particularly by modeling effective management and leadership

The managing director operates above all of the departments, and various department heads and managers report to them. Depending on the size of the company, the managing director may have one or more deputies to help them handle the workload.

Board Meeting

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Traits of an Effective Managing Director

An effective managing director is somebody who has years of experience at the management level. The managing director position is typically one where somebody earns the necessary qualifications over their career. However, there are also specific traits that can make somebody particularly well-suited to the position.

Traits of an effective managing director include:

  • Leadership skills: Effective managing directors have a clear and compelling vision for the organization’s future. They can articulate this vision and business plan to the team and stakeholders, inspiring everyone to work toward common goals.
  • Strategic thinking: Managing directors think strategically and are skilled at formulating long-term plans and objectives. They can assess market trends, identify opportunities, and make informed decisions that align with an organization’s vision.
  • Decisiveness: Making tough decisions falls within a managing director’s role. They can analyze complex situations, weigh the pros and cons, and take decisive actions when necessary, even in the face of uncertainty.
  • Strong communication: Effective managing directors are exceptional communicators. They can convey their vision and ideas clearly to the team, shareholders, and other stakeholders. They also actively listen to feedback and encourage open communication throughout the organization.
  • Adaptability: The business landscape is ever-changing, and managing directors must be adaptable to navigate through challenges and seize new opportunities. 
  • Financial acumen: Managing directors must have a solid understanding of financial matters and be able to manage budgets, allocate resources efficiently, and drive financial performance.
  • Continuous learning: The best managing directors are lifelong learners. They stay updated on industry trends, attend workshops and conferences, and actively seek knowledge to enhance their leadership skills.

OnBoard Powers Effective Managing Directors

The managing director is vital to keeping an organization running. A board portal platform like OnBoard empowers the managing director and board in ongoing business administration. Purpose-built for boards, OnBoard features help board members run effective meetings, get the analytics they need, and collaborate in real time.

For an excellent starting point, download our free board meeting agenda template to see what OnBoard can do for your organization.

Frequently Asked Questions (FAQ)

  • What is the Difference Between a Managing Director and a Director?

    A director is an executive who manages a particular department. For example, you might have a director of marketing, director of human resources, or a director of facilities. Directors report to the managing director, so they are one level down. Each director is fully responsible for their department and accountable to the board through the managing director.

  • What is the Difference Between a Managing Director and a CEO?

    These terms are sometimes used interchangeably. In smaller organizations, the CEO may also take on the responsibilities of the managing director and may be called by either term.

    However, in larger organizations the difference is actually stark. Rather than being directly involved in operations, the CEO may be responsible for the organization's overall strategic direction. 

    The managing director is the "executive officer" of the company and is seldom seen by outsiders, but rather works directly with employees. The CEO gives the direction; the managing director makes it happen.

Board Meeting

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About The Author

Josh Palmer
Josh Palmer
Josh Palmer serves as OnBoard's Head of Content. An experienced content creator, his previous roles have spanned numerous industries including B2C and B2B home improvement, healthcare, and software-as-a-service (SaaS). An Indianapolis native and graduate of Indiana University, Palmer currently resides in Fishers, Ind.