Difference Between MD and CEO
MD vs CEO
MD stands for Managing Director, and CEO stands for Chief Executive Officer. Although these two terms can be confusing when it comes to one’s roles and responsibilities, there are distinctive differences between the two.
When discussing the differences, a Managing Director is responsible for the day-to-day business of a company while a Chief Executive Officer does not have huge responsibility for the day-to-day affairs of a firm.
The MD will be a member of the Board of Directors, and is also head of the management of the company.
The other major difference between the Chief Executive Officer and a Managing Director, is their responsibilities. The CEO has the responsibility to facilitate business, and should also have a strategic vision to align the company, both internally and externally. A CEO has to guide the employees and the executive officers.
A Managing Director is the leader of an organisation. She/he is the real motivational force for others, and she/he is a person who develops a corporate culture for an organisation. Since the MD is responsible for the day-to-day business of on organisation, she/he would be responsible for the overall management of an organisation. She/she is a person who has to bring in innovations and expansions.
Managing Directors are always held responsible for any action of the company. Moreover, the MD is accountable to the share holders. On the other hand, the Chief Executive Officer does not have to shoulder these responsibilities.
Summary of MD vs CEO
1. A Managing Director is responsible for the day-to-day business of a company. On the other hand, a Chief Executive Officer has no responsibility for the day-to-day affairs of a firm.
2. The MD will be a member of the Board of Directors.
3. The MD is responsible for the overall management of an organisation. The CEO has the responsibility to facilitate business, and should also have a strategic vision to align the company, both internally and externally. A CEO has to guide the employees and the executive officers.
4. Managing Directors are held responsible for any action of the company. She/he is also accountable to the share holders. On the other hand, the Chief Executive Officer does not have to shoulder these responsibilities.
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Hi,
Thanks for nice differentiate. Please send the explain to my email of Officer and Executive.
Bye
Ratin
From Dhaka, Bangladesh
it’s good dirrerentiate, if u have info about difference all kind of director please send info to my email
thank you
who reports to who? ceo report to md or visa versa? i need to know their hierachy in the company if its havin the two of them? thank you.
MD reports to CEO
dear,
am planing to make a business cards, am a owner of the small trading company and managing all branches purchasing and etc.so i can mention my own visiting card “MD (CEO) ”
please am waiting ur prompt replay
ashraf
Hi,
could you please specify the difference between the Managing Director and General Manager position? I would appreciate if you could send your answer by mail for me.
Thanks
Edy
Edy,
The Managing Director is Director among Board of Directors and Is also Responsible to Take Care of Day to Day Affairs and Functioning of the Firm. MD can be Called Most active Director on Board of Directors.
General Manager isn’t on Management Position or on Board.
He is Accountable only for General Sales / Accounts and To Guide the Human Resources.
I don t think the author has clarified this properly, the author mentions the MD is responsible to the board of directors but the C.E.O. isn’t, i don’t somehow think this is right.
There is no difference between an M.D. or a C.E.O. both have to be part of the day to day operations of the business and both are responsible to the board of directors.
C.E.O. is used by America more and M.D. in Britain.
And I think you are very right. The thing is, Americans use CEO more while the Brits use MD more. You cannot have a CEO and an MD in the same company. They are the same level. In fact, the author created a confusion where none exists.
A CEO is not necessarily a board member. A managing director is.
CEO and MD Co Exist in a Company. MD is the DirevtorResponsible to Run Business
I thought as much. thank you for this verifications
information is very helpful.
a lot of thanks………………
I didn’t recognize that who’s the main in a company CEO or MD. Who’s big from each other?
The Managing Director is the head of the company and takes responsibility of the company. Hence, the Managing Director is the more important one here and the superior one too.
can the MD be the CEO as well , will there be a problem there?
Thanks for the information your this info is really help me to improve my GK and knowledge about an organization
Thanks a Lot
Sorry – I think you’re mistaken.
Well according to Bob Tricker in his book ‘Corporate Governance – Principles, Policies and Practices – 3 rd Edition.
He states …. ‘The chief executive officer (CEO), sometimes known as the managing director in commonwealth law jurisdictions…’ pg 92.
Base on this, they are the same position. My guess is that the article has confused CEO with the Chairman. In comparing these two roles it was recommended by the Cadbury Report that the two be separated. The CEO would have a more hands on approach to the day to day management. While the Chairman didn’t.
Making CEO about information. What is reason to company have CEO officiali am I write or nor. Please give information sent to my email id.
Than you.
Who is biggest between CEO or MD.
Making CEO full information about it please give me information.
T.y
What is the difference from a P&L standpoint?
Ok who sacks the CEO
Who sacks the MD I have both in my company and want to report them who do I go to
The business owners can sack the M.D. or CEO.
The owners may just be 1 person or 1000’s of shareholders who are usually represented by a board of directors.
If your company has a chairman, report them to them. It’s highly unusual for a company to have both an MD and CEO
Please could you change the ‘he’ to ‘they’. We’re not living in the 1940s. Thanks.
Hey Athena. Definitely we should use they. Am your fun too!
Dr Alphonse
Very well explained. Hats off.
To understand this article completely the key rule according to me is to first unlearn what we already knew and then relearn.
The author has clearly defined KRA for both.
You have differentiated exactly opposite. Your diffentiation is mismatched in many roles.
“A Chief Executive Officer has no responsibility for the day-to-day affairs of a firm”. No. Pretty much everyone would recognise the CEO of a business as the executive who is ultimately responsible for all the day-to-day affairs of the firm. Quite the opposite. Is the author confusing CEO with a board-focused role perhaps? Chairman or President or something like that?
He is resposible? Surely a CEO or MD can be either male or female. Get with the times
Thanks for the article – it’s great – apart from the gendered language. Women are leaders too, please let us own that power. Men do not have to be the default and should not be.
Please be part of the positive change!
Thanks for your explanation between MD and CEO.please keep on updating me on this information.thanks so much
The author got the whole explanation wrong and should be regarded, he is confusing a Chairman of a board or an owner of a business who doesn’t want to take up the responsibility of running the company as CEO. Having a CEO and MD in the same organisation or change of command doesn’t make sense, Is the SAME position and workers will be confuse who is in charge, one should be made deputy of the other. The CEO is normally use instead of MD when an owner or shareholder of a business is made a director of the company.
This article is such a lie, sorry. It only serves to create unnecessary confusion sadly.
Confusing article.
I think in Britain and India rich people decide to start a business, make a board, appoint an MD to run the business. Basically, investor-owned, controlled, and run business. The MD is paid and has a fixed term. Other execs like President are appointed to run the day-to-day.
In the US, companies are usually management/founders run. An idea comes to mind, a team is built, product work starts, capital is raised. Either the founder becomes the CEO or appoints the CEO until a board might throw them out later for whatever reason or the CEO can keep running the company for life.
In either case, the CEO or the MD facilitates the communication between shareholders, board, and company execs and team. In the US case, the company is run by a COO, CMO, CTO, CFO, etc. In the British/Indian case, the company is run day-to-day by President, Vice President, etc.