Director and CEO: difference, job descriptions, functions

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

The market economy gives a lot of freedom for business development. And the modern legal system supports and regulates many different forms of its organization. We often hear words such as "general director", "executive director", "company president". How are these positions different? What functions do these people perform? Is there a difference between a director and a CEO? Let's try to figure it out.

Who and how can take a leadership position in the company?

Any small or large business has a founder. This is one or more people who have invested in the development of a company for the production or provision of services. That is, in fact, the founder is the founder. And his company can exist in many ways and in different forms: as a joint-stock company, partnership, for-profit or non-profit organization, etc.

There are threeoptions for selecting a candidate for a managerial position: this may be one of the founders, the position may also be occupied by an employee who is entrusted with a number of functions and powers. This hired worker can be selected from among the already existing employees, who has experience and knowledge about the company. A suitable candidate in terms of experience, skills, degree of qualification can also be selected from outside.

Thus, the differences between the founder and CEO are significant, since the founder is not directly involved in the management of the company.

In any case, the person holding this position assumes responsibility for the development of the company and making strategic decisions.

Features of the title of a managerial position

The title of the highest managerial position depends on several factors:

• is the enterprise commercial or not;
• how many companies (one or the whole network) will be subordinate;
• one or more people are the founders of the enterprise.

As a rule, the word "director" is applicable to non-profit organizations. For example, the director of a school, kindergarten and any other organizations that do not aim to obtain commercial benefits.

Another option when the word "director" is applicable is the title of a position in charge of some direction, for example, commercial director, director of advertising and public relations, director of personnel management.

Bcommercial organizations usually this position sounds like "CEO". Another option is "company president". Usually it is used when appointing one person to the position of the head of several enterprises at once. For example, chocolate factories, chains of confectioneries and shops, the founders of which are the same people.

Another feature depends on the number of founders. If there is only one founder and at the same time holds a managerial position, then it can be referred to as "general director" or simply "director".

Who approves the position and how?

If the company has several founders (board of directors), then it is they who approve the candidacy at the general vote. After that, a job description is drawn up, which spells out all the rights and obligations, powers and degrees of responsibility attributed specifically to the position, and not to a specific person. After that, the candidate is officially approved for the position by one of the authorized founders.

If the organization's founder and head are the same person, then the procedure for appointment to a position is similar. The job description is still drawn up and is a document regulating the powers of the director within the organization.

If the appointment takes place in a non-profit organization, then the approval is made in the authorized body to which this enterprise is subordinate or also by the board of founders. For example, a school principalis approved by the city or district department of education, and the director of the animal welfare fund is appointed by the board of founders.

General functions of directors of all types of enterprises

Despite the differences that we will discuss below, any director performs a number of functions and bears certain responsibilities.

It is the director who signs, approves and concludes all current documents, reports, contracts, employment contracts. Controls expenses, results of the organization's work, is responsible for the safety of property, organization of labor safety.

The director makes strategic decisions based on the opinion of the board of directors, the company's development strategy or personal opinion.

What is the difference between a CEO and a director?

Let's try to understand the distinguishing features of the two positions. The difference between a director and a general director in an LLC, for example, is not so easy to notice. In fact, these are two management positions regulated by job descriptions and bearing certain responsibility for the organization, its employees and activities.

The fundamental differences between a director and a general director begin when it comes to commercial activities. In commercial organizations, the CEO leads, in non-profit organizations, the director.

The following differences between a director and a CEO can be found if the term "director" is applied to a managerstructural division. In this case, the duties of the employee will be to control and ensure the normal functioning of only one specific area. Powers will be limited to the same framework. Whereas the CEO manages the entire enterprise as a whole.

Position "executive director"

The executive director is also a person who takes part in the management of the company. This can be either a member of the board of directors, who has the function of direct management and at the same time obeys the opinion of the board, or a leader with lesser powers, reporting to the general director. Thus, there may be two options for a candidate for this position.

The difference between an executive director and a CEO lies in subordination. The former may report to the CEO or the president of the company, while the CEO reports only to the board of directors.

There are also differences in the positions of executive director and deputy general director. The first may be the head of a subsidiary, be responsible for it to the general director or president of the company. He performs a leadership position to the fullest. This is the difference between an executive director and a deputy general manager.

When does a leadership position sound like "company president"?

The differences between a president and a CEO are as follows. The presidentcompanies can be appointed if it is not about one enterprise, but about a whole group of organizations, a holding.

The functions of the president and CEO are similar, but the title of this leadership position indicates the size of the subordinate organization and its structure. The subordination of the president may include both the executive director and directors of structural divisions.

Conclusions

Thus, we can say that there are definitely differences between the director and the general director. Although in some cases they are quite difficult to notice. Just like the difference between an executive director and a company president, and so on. This difference is seen to a greater or lesser extent, depending on the situation and the characteristics of the organization.

In any case, according to the law, the title of the main managerial position is determined by the charter approved by the Board of Founders or an authorized body. Therefore, in similar organizations, the same position may have a different place in the hierarchy.