How to become a Managing Director? CEO vs MD differences

The full form of MD is Managing Director. Companies, corporate houses and organizations have a managing director on their board of directors. The post of managing director in a company is among the apex designations assigned by the core committee of the company.

A managing Director is a rank below the company’s senior managing director or chief executive officer of the company. A managing director is a higher-level position in a company, and the responsibilities related to this post are vast and vital.

Powers of a managing director

  • Can establish direct contact with the chamber of commerce, central government officials and trade unions on behalf of the organization.
  • Can use the administrative power for the welfare of the company.
  • Can recruit, transfer and promote the employees for the company’s benefit. In some cases, permission from higher authorities is required.
  • Can regulate the company’s operations and present the proposed regulations to the board of directors.

Must have attributes of a MD

Along with a good working experience, an individual must have a set of qualities to become capable of acquiring and successfully working as a managing director of a company. The essential qualities of a managing director are:

  • Working experience of three years as a manager, Director, or similar post.
  • Skills in developing strategic business plans and effectively implementing them.
  • Effective communication skills, impressive presentation skills and good negotiation skills.
  • Critical thinking, problem-solving approach and team-leading qualities.
  • Updated knowledge of technology and savvy to technology.
  • Must be a pro for work-pressure situations.

What are the responsibilities of an MD?

When an individual is given the designation of Managing Director of the company or organization, there are several responsibilities they are oath to regarding the post. Some of the significant responsibilities of an MD are:

  • MD of a company heads the whole management system of an organization or company. An MD uplifts the company’s overall growth,
  • He/she can participate effectively in the company’s primary business operations and implements innovative and strategic business plans that endeavor growth in the company.
  • Regulates and manages the valuable assets of the company.
  • Effectively establish communication between the company’s board of directors and its shareholders.
  • Heads the management team of the organization.
  • Take charge of the company’s overall operations and report the issues to the board of directors whenever necessary.
  • Frame strategies and business policies for the company.
  • Keep a keen interest in framing the annual budget and allocating it to various company departments.
  • Plans and motivate the teams to achieve the significant targets of the company within or before the deadline.
  • Monitor the company’s ongoing processes and make sure that implementations of the planned structure are on the right track.

Who appoints and term of MD

  • The appointment of the managing director in a government organization is made with the approval of concerning the ministry of the central government.
  • The company’s board of directors takes decisions on managing the director post of a private organization.
  • In government organizations, an MD is appointed for five years. There can be further exceeded for the second term for an individual as managing director after five years.
  • In private or public organizations, the term of managing director depends on the company’s recruitment policies.

How to become a Managing Director?

The post of Managing Director needs a lot of prior experience in the related field and high education qualifications. The education qualification and years of work experience required for becoming a managing director are mentioned below:

  •  Bachelor’s degree in business administration or a bachelor’s in commerce degree is the first step to heading your journey towards becoming a company’s managing director.
  • After completing your bachelor’s degree, consider having a job in an excellent corporate house or business company for at least three years. The experience and knowledge you gain in your career at this level is valuable than the salary you get.
  • Once you know thoroughly about the working culture in a company, then move forward to advance your educational qualification.
  • Enroll yourself in a master’s degree in business administration or MBA.
  • The course study for the Master of Business Administration will enhance your knowledge, develop your leadership qualities, and learn thoroughly about business administration that is much required to successfully endure the position of a managing director of a company.
  • Further, you can consider an additional course on the company’s directors. Many institutes in the world come up with excellent such courses. You can google for the courses and related stuff online.
  • Once you get a fair amalgam of degrees, certificate courses, and work experiences, you can apply for the post of manager in different company departments.
  • Your skills, educational qualification, work experience and decision-making qualities are the only way to endeavor to the post of MD and beyond that.

Difference between a CEO and MD

  • There are several companies in the world where a single individual holds the position of MD and CEO.
  • The position of CEO is the apex in an organization after the board of directors of the company. The role of the Managing Director is one step below to CEO in an organizational hierarchy.
  • A Chief Executive Officer (CEO) looks after the overall internal and external operations of an organization. The Managing Director manages the internal day-to-day work of an organization.
  • The CEO is the company’s public face and holds a strong vision for the organization’s upcoming future. At the same time, a managing director strengthens the organization by managing its logistical operations.


  1. Which is the higher rank in a company Managing director or CEO?

Answer: CEO is the higher rank in the company, and MD is the second-highest rank.

  1. Does the post of Managing Director lie at the ‘C’ level in a company?

Answer: No, the C level is the title of the CEO (Chief Execute Officers), CIO (Chief Information Officers) and CFO (Chief Financial Officers) of an organization.

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