Whether you’re wondering if a CEO or managing director is higher or whether you’re aiming for the top job, we explain the similarities and differences between the roles.
Is a director higher in the hierarchy than a CEO?
The short answer is, it depends. Some organisations won’t have both a CEO and a managing director. When they do, the CEO position generally sits at the top of the hierarchy. But that can also depend on a number of factors in the organisational structure.
Here’s an overview of the responsibilities of a managing director vs CEO.
The role of a CEO
The chief executive officer (CEO) in an organisation is responsible for the strategic direction and financial viability of the business. A CEO isn’t so much involved with day-to-day operations but serves as a link between the board of directors and the company.
Depending on the size and structure of the organisation, the responsibilities of a CEO may include:
- Overseeing the vision, mission and strategy of the business
- Safeguarding the company culture and values
- Representing the business through the media and industry groups
- Working alongside the executive team in areas such as finance, marketing, operations, risk and human resources
- Accountability for the overall success of the organisation, such as maximising the share price
- Liaising between the board of directors, managing director and the rest of the company
The role of a managing director
The responsibility for daily operations generally falls to the managing director of a business. They work with different parts of the business to help them achieve their strategic objectives.
The duties of a managing director may include:
- Resource management across the business, including people and financial resources
- Creating and implementing customer retention strategies
- Providing business plans and reports to the executive team and CEO
- Motivating and mentoring managers across different levels of the business
- Working closely with the CEO
- Managing company affairs, with the exception of administrative tasks such as signing cheques
Similarities between a CEO and managing director
Despite the differences between a CEO and a managing director, there are several skills or capabilities that are consistent across both roles.
While both roles share a similar salary level, entrepreneur and CEO Colin Anstie cautions against entering this type of role for the money.
“It’s a gritty, gruelling, stressful, hard job,” he says. “I think the media glamorises it, but it is really hard every day. Don’t ever do it for the money.”
In some cases, a CEO will also hold the role of managing director. In this case, there will be many crossovers between the roles. Other CEO and manager or managing director crossover skills include:
- Leadership and management
- Communication and conflict resolution
- Analytical and strategic thinking
Anstie says that the type of people who succeed in these roles need to have an open mindset to learn all the different skills required.
“You need to be handy in most areas of business in order to run a successful business, so curiosity is a great trait to have,” he explains. “The other skills that are critical are resilience, sound financial understanding and a certain charm that makes people want to work with and for you.”
CEO vs managing director – which am I suited for?
If you’re planning a career change or climbing the corporate ladder to get to the top job, it’s important to understand your strengths and skills. If you’re somebody who is a visionary thinker and enjoys strategy, you may lean more towards the CEO role. If you’re more comfortable in the operations of a business and bringing strategy to life, the managing director role may be a better match.
As Anstie progressed his career, he focused on building the skills he would need to lead his own business one day. Consider what you’ll need to succeed in a management interview and beyond. Then you can chase those skills as you progress through your career.
“I did an apprenticeship of sorts by working my way through different roles in different organisations,” he explains. “I mastered the skills I needed before I was ready to make the leap into my own business.”
Anstie also completed an MBA, something that he says has played a big role in his success.
What skills does an MBA give you? Other than powerful connections with other senior managers and CEOs, Anstie says that he learned a mix of crucial hard and soft skills that he has used in his role.
“An MBA is a huge personal confidence builder,” he explains. “You get thrown into so many uncomfortable situations, such as dealing with live case studies. This helps you to develop the skills you need to deal with humans, team members, clients and deadlines.”
Not to mention that MBA graduate salaries do typically trend higher across senior management positions.
Leap to the top
An MBA can help to propel your career in the direction you want to take it. From building valuable connections to developing a strong general management skill base, never underestimate the power of an MBA.
Gaining relevant education and experience is the key to moving up the corporate ladder.
Before committing to an MBA based on the reputation or location of a university, consider the units you will study and the learning outcomes.
Discover MBA courses from universities in Australia. Find the right program that can give you relevant knowledge and skills to work towards a senior role in your industry.