Question

what is the difference between MD and CEO ?

regarding enterpreneurship and job profiles

7 years ago - 4 answers

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MD
Managing director is the term used for the chief executive of many limited companies in the United Kingdom, Commonwealth and some other English speaking countries. The title reflects their role as both a member of the Board of Directors but also as the senior manager.

Roles and responsibilities
The role of a Managing director (MD) is to design, develop and implement the strategic plan for their company in the most cost effective and time efficient manner.

The Managing director is responsible for both the day-to-day running of the company and developing business plans for the long term future of the organisation. The Managing director is accountable to the board and the shareholders of the company. It is the board that grants the Managing director the authority to "run" the company.

In addition to the Managing director, most companies have a Board of directors. This board usually consists of such posts as: Finance director, Sales director, IT director, Marketing director, Technical director and Chairman. In addition to these posts there may be a number of other directors including non-executive directors.

The Managing director is very much a figurehead for an organisation and they fulfil a motivational role for the workers in addition to their more office-based work. MDs motivate and mentor members of the management team and chair meetings. The MD leads the company and develops the corporate culture for the organisation.

As the title suggests, the Managing director needs to manage everything. This includes the staff, the customers, the budget, the company's assets and all other company resources to make the best use of them and increase the company's profitability.

The MD or Senior MD reports to the Board of Directors on a weekly or monthly or quarterly or semi-annual or annual or every decade basis to keep them informed of how the company is doing. The board will offer suggestions and ideas about how to improve the company to the Managing Director. It is the MDs responsibility to implement, improve upon or ignore these ideas.

The MD is legally responsible for the company's affairs, so they must comply with the appropriate rules and regulations set out in company law. These include following the proper audit procedure and not allowing the company to break any trade embargos or dealing in any illegal goods.

Finally, a MD is responsible for devising a succession plan to ensure that somebody is trained to assume the management of the company when the current MD resigns or retires. It is also important in case of unforeseen circumstances, such as the MD having an accident, that somebody else can run the company.

In the United States the term refers to a person in charge of a specific aspect of a business. This can be an officer or Director of the corporation in which the individual is employed.

CEO
A Chief Executive Officer (CEO), or Chief Executive, is the highest-ranking corporate officer, administrator, corporate administrator, executive, or executive officer, in charge of total management of a corporation, company, organization or agency.

In closely held corporations, it is general business culture that the office of Chief Executive Officer, CEO, is also the chairman of the board. Specifically, one person often shares the chairman and CEO titles while another person takes the presidency or may become chief operating officer (COO). However, the term president is from the U.S. and in the UK COO is favored. Underneath that comes the Executive Vice President (U.S.) or Executive Director (UK). In publicly held corporations, the CEO and chairman positions can be separated but there are implications in corporate governance by doing so.

In some European Union countries, there are two separate boards, one executive board for the day-to-day business and one supervisory board for control purposes (elected by the shareholders). In these countries, the chief executive officer presides over the executive board and the chairman presides over the supervisory board and these two roles will always be held by different people. This ensures a distinction between management by the executive board and governance by the supervisory board. This allows for clear lines of authority. The aim is to prevent a conflict of interest and too much power being concentrated in the hands of one person. There is a strong parallel here with the structure of governments, which tend to separate the political cabinet from the management civil service.

In rare circumstances an Executive Chairperson can be appointed but this is either illegal in many jurisdictions or frowned upon by Regulators.

In the United Kingdom many Charities and Government Agencies are headed by a Chief Executive who is answerable to a Board of Trustees or Board of Directors. In the UK, the Chairman (of the Board) in public companies is more senior than the Chief Executive. Most public companies now split the role of Chairman and Chief Executive.

Reporting structure
Typically, a CEO has a cadre of subordinate executives, each of which has specific functional responsibilities. These direct reporting relationships most often include: Chief Financial Officer, Chief Operating Officer, Chief Marketing Officer, and Chief Information Officer. Although not an Executive, the Director of Human Resources plays a vital role within any corporation.

However, depending on the industry in which the company operates and/or the organizational structure the company has employed, various other functional areas may be highlighted through the CEO's direct span of control. Some of these less common monikers include: Chief (Business) Development Officer, Chief Knowledge Officer/Chief Learning Officer, Chief Strategy Officer, Chief Risk Officer, and Chief Credit Officer.

Source(s):

7 years ago

Other Answers

MD is the one who manages the Operations

CEO is the one who give orders and get the things done soon

by DoN - 7 years ago

M.D IS INVOLVED ONLY IN POLICY MAKING,BUT NOT IN EXCUTION
BUT C.E.O IS MORE INVOLVED IN EXCUTION ALSO.

by VRK R - 7 years ago

MD (Managing Director) is a person Appointed under the covenants of Companies Act 1956, his appointment, remmuneration, tenure, renewal are under the scrutiny of Ministry of Company Affairs, in case of Limited Companies. His appointment is to approved by the Central Government (in some cases), Shareholders (all cases), Board of Directors (initially) and supervised by Articles of Association. An MD is a legal authority for several documents under several business regulations. He is primarily responsible, on record, for the correctness of the Govt / Statutory Documents filed with Govt. Authorities. Any company will have only one MD and it is a legal position.


CEO (Chief Executive Officer) is the formal designation generated out of business practices. Mostly connected with the NON-Govt. NOn-Statutory affairs and business affairs of the company with the world. It has no legal validation and obligations attached with the post held, except public liability.

by CharteredAccountant - 7 years ago