The Difference Between CEO, President & Managing Director
The corporate titles of chief executive officer, president and managing director carry distinctly different meanings. Chief executive officers serve as companies’ strategists and cheerleaders, with the implementation of objectives left to senior management. Managing directors act like CEOs, but operate in the two-tiered corporate board setup characteristic of British firms. Company presidents are more actively involved as managers, on the other hand, but also report to a board of directors that guides the organization’s direction.
A chief executive officer sets the tone for a company’s image, management and operations. At large corporations, the CEO may function more like a strategist, with other senior executives responsible for implementing his plans. At smaller firms, like retail stores, the CEO may also oversee budgeting, hiring, purchasing and day-to-day management. In either instance, a CEO faces constant pressure to help his firm achieve its long-term financial goals, or risk jeopardizing his future.
At governmental agencies or nonprofit corporations, a corporate president may be more directly involved than CEOs in day-to-day management activities. At the Corporation for Public Broadcasting, for example, the president must report all significant activities and undertakings to the board of directors. The president also develops the annual CPB budget, and serves as chief spokesman.
The managing director is a British phenomenon who acts like a CEO, but in a different environment than his U.S. counterpart. About 79 percent of British firms split power between CEOs and an independent board chairman, The Wall Street Journal noted in March 2009. The director is also bound by the Companies Act of 2006, which requires him to consider the social and environmental consequences of his decisions. The act marked the first time that such guarantees became part of British law, according to a Corporate Responsibility Coalition analysis.