Today, they are becoming the new leaders of the public sector with public institutions often being supervised by a board. It is important to emphasize that contrary to popular beliefs the appointment of CEOs to companies and state-owned entities operating under the companies Act are supposed to be approved by the board. In the public sector, or in non-profit organizations, CEOs are largely focused on achieving the organization’s long term and short-term developmental strategies and socially responsible citizenry objectives. James brings broad experience in drug development and commercialisation, acquired through regional and global roles in the biotech and pharmaceutical sector. His previous responsibilities have included leading phase I-IV clinical trials, product registration, reimbursement, and business development.
A CEO is more focused on the big-picture vision, external communication with the public and board members, and the overall health and direction of the business. Separating these two posts is desirable and considered a good governance practice in public and large private companies as it avoids overlapping powers & authority. In all cases the CEO operating under the Companies Act as affirmed by the Institute of Directors, UK, South Africa, and Ghana are accountable to the duly authorized board and nobody else. On June 1, Tata Consultancy Services (TCS) announced the appointment of its new Chief Executive Officer & Managing Director, Krithi Krithivasan, marking the company’s fifth CEO since its inception in 1968. This remarkable statistic of having only five CEOs over 55 years highlights the stability and quality of TCS’s management.
- Managing your compensation during career transitions can be tricky.
- If so, the CEO knows better than anyone why the company was founded, its big reason for being and what the strategic goals are for the long term.
- This position provided ample personal growth opportunity, which led to his current job as senior vice president of operations in a mid-size suburban community hospital — three moves.
- It’s essential for managing directors to be able to think critically, make good decisions, and be good problem-solvers, as they often work in high-pressure situations.
The CEO of a company is not necessarily the owner of the company, and depending on the company’s structure, their responsibilities and roles can change. 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. However, it is possible for a company’s Managing Director and CEO to be the same person. This is most often the case in a startup or small business, where a company’s founder sometimes performs the roles of both positions.
More in ‘Business’
Dr Jamed Garner will assume the roles as of 07 August 2023. In the interim James will join the Board as a non-executive director, effective immediately. A CEO (or Chief Executive Officer) in contrast, is responsible for the general direction of a company or group, and of its overall financial performance.
In larger nonprofits, different employees serve in the CEO and managing director roles. By contrast, smaller nonprofits may not have the budget to staff the positions separately. Nonprofits in the growth phase may assign the duties and responsibilities of the CEO and managing director to one individual temporarily and add either a managing director or CEO to their staff later on.
Key Differences Between Chief Executive Officer vs Managing Director
This individual is often responsible for a startup’s day-to-day operations, staff oversight, and project management within their given vertical. Depending on the size and structure of the organization CEOs as pointed out by Leblanc R. Krithi will be succeeding Rajesh Gopinathan (2017–2023), who announced his sudden resignation earlier this year. Gopinathan will remain with the company till September 16 in an advisory role. He was elevated from the role of chief financial officer to CEO in February 2017 after his predecessor N Chandrasekaran was appointed as chairman of Tata Sons. Many small business owners feel that having both a CEO and a president would be too many bosses at the top for the size of their company.
In some companies, they work as the head of a unit within a company rather than in managing the entire company’s functioning. They belong to the board of directing managers and are responsible for the business and management of the overall company. Managing Directors are held responsible for any action of the company. On the other hand, the Chief Executive Officer does not have to shoulder these responsibilities. 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.
CEO & MD definition
The title of managing director is sometimes used instead of the CEO title. This is primarily a British title used in lieu of CEO, however, and one that would be confusing in the U.S. The word “managing” sounds hands-on, as if the one with this title would be handling day-to-day operations. CEO, the title of managing director would likely be misunderstood. The chief executive officer (CEO) is the Top Dog, the Head Honcho, the Number One in command.
In some cases, the titles of CEO and Managing Director are held by the same person. This is most common when the CEO is also the company’s founder. While this isn’t unusual, however, in larger and more complex companies, these titles may be held by different people. Now that we have a better understanding of CEOs’ and MDs’ roles and responsibilities let’s look at some key differences between them.
Or the co-owners might decide that one is more of a long-range thinker while the other is better working with people hands-on, so the former becomes the CEO and the latter is the president. However, be cognizant that you are in a competitive environment. Every time you pursue opportunity outside your traditional role you may be taking that opportunity away from another aspiring non-physician executive.
A common physician expectation is that the medical degree confers a certain level of compensation guarantee. This is certainly true of “MD/DO-required” jobs, such as medical director or VPMA/CMO. However, there comes a point at which ceo vs md your physician credentials are no longer relevant. One physician executive learned this lesson during his MBA program. This wasn’t working too well so he had no choice but to let go and allow himself to be dependent upon others.
You cannot possibly know everything there is about complex operations. Listen to your employees, especially the frontline workers. The use of the CEO title is not necessarily limited to describing the owner or the head of a company. For example, the CEO of a political party is often entrusted with fundraising, particularly for election campaigns.
MDs, on the other hand, oversee only a specific division within a company and ensure that employees follow established company policies and procedures. MDs are generally involved in the daily management and operations of organizations and provide motivation to the employees. Heads of departments and divisions report directly to the managing director who plays a vital role in the smooth functioning of each organizational division. Whilst a Chairman is responsible for strategy, the CEO is required to deal with operational matters. Other main board directors report to the group CEO and the CEO reports to the chair.
For example, in large organizations CEOs generally only deal with very high-level strategy and decision-making that impacts on the overall growth of the organization. In smaller companies, they can take on a more hands-on approach, taking responsibilities for lower-level business decisions such as the hiring of employees. The physician executives interviewed agreed that leadership is the number one success factor for CEOs. In operations management, being an independent performer is a death sentence.
Tata Consultancy Services (TCS) appoints Krithi Krithivasan as CEO and MD.
It is critical for managing directors to communicate regularly with the CEO and share their concerns before any situation gets out of hand. CEOs count on managing directors to provide the status and scope of an organization’s operations. This person’s official title would be, “Sandra Smith, President and CEO.” Either job title can be listed first. This means she sets the vision and mission, plus handles the day-to-day operations of the company. Some of the handpicked executives unfortunately do not have the personal qualities, and sometimes the background to occupy the position.
- Only physicians can be hired as a medical director or as the VPMA.
- While the CEO does not report to other employees, they are accountable to the board of directors.
- A managing director is like the stage manager of a play overseeing each move while a CEO is analogous to the play writer.
- In these countries, the CEO presides over the executive board and the chairperson presides over the supervisory board, and these two roles will always be held by different people.
To best understand the position of managing director vs. CEO, it important to get to know the roles and responsibilities of the chief executive officer. The nonprofit CEO is the highest-ranking employee in the organization. While the CEO does not report to other employees, they are accountable to the board of directors. The board is responsible for hiring a qualified CEO and firing them if they don’t fulfill their responsibilities. As an executive officer of the company, the CEO reports the status of the business to the board of directors, motivates employees, and drives change within the organization.
Newly Added Differences
Typically, responsibilities include being an active decision-maker on business strategy and other key policy issues, leader, manager, and executor. The CEO is tasked with implementing the goals, targets and strategic objectives as determined by the board of directors. There is a lot of confusion about the roles and responsibilities of CEOs and Managing Directors. To begin with, the CEO of an organization is the top decision-maker. They make all significant decisions for the company and report directly to the board of directors. On the other hand, a Managing Director is a high-ranking executive in charge of a specific business division or product.
Some companies may even choose to have both, a CEO and a Managing Director; in this scenario their job responsibilities may be split between the two. A CEO can be found in public or private organizations, NGOs, and non-paid organizations. This generation’s CEOs must have a top degree in science, technology and business management.
Hire the Best Executive Talent with Hunt Club
Hunt Club specializes in sourcing hard-to-reach executives through a powerful combination of trusted introductions and cutting-edge technology. This has been a guide to the top difference between Chief Executive Officer vs Managing Director. Here we also discuss the Chief Executive Officer vs Managing Director key differences with infographics and a comparison table. You may also have a look at the following articles to learn more.
Aeronics Internet Pvt Ltd is an internet service provider (ISP) company in Bengaluru. With the assistance of the search firm, Wexford Hayes Pty Ltd., a comprehensive executive recruitment process was initiated following the AGM in 2022. The Board was encouraged by the quality of candidates that made the short list, but in the end, James’s combination of experience, capabilities and attributes was decisive. AAPL providers leadership development programs designed to retain valuable team members and improve patient outcomes.