Difference Between CEO and Executive Director

There are several positions of authority in a business corporation, firm, company, or non-profit organization. However, each position has its specific roles and responsibilities that make it distinct from the others. A CEO and Executive Director are two such positions of power in a company that have their jurisdictions and areas of operation.

CEO vs Executive Director 

The main difference between a CEO and executive director is that a CEO is answerable to the Board of Directors and works under their authority. On the other hand, an executive director is an authority that monitors the functioning of the Board of Directors. 

CEO vs Executive Director

A CEO refers to an individual of superior authority in a business or a firm who takes sole responsibility for managing the organization’s tasks.  The CEO can bring about considerable changes in the policies of the organization. In addition, the CEO of a company is usually not the owner of the company. 

An executive director refers to the manager of a companyès business policies, and day to day functioning. An executive director takes up the responsibility of developing the culture of the organization. Moreover, an executive director is empowered by the board of directors to run the organization. 

Comparison Table Between CEO and Executive Director 

Parameters of ComparisonCEOExecutive Director 
Answerability A CEO is not answerable to the shareholders of the company.An executive director is answerable to the shareholders of a company. 
Accountability The CEO is accountable to the Board of Directors. The Executive Director provides guidance to the Board of Directors. 
Another NameAnother name of CEO is the Chief Administrative OfficerAnother name of Executive Director is the Managing Director. 
SalaryThe salary of a CEO is usually higher than that of an Executive Director.The salary of an Executive Director is usually lower than that of a CEO. 
AssociationA CEO is usually associated with business corporations and firms. The Executive Director is usually associated with non-profit organizations. 

What is a CEO?

CEO stands for Chief Executive Officer. CEO refers to an individual responsible for managing an organization. CEOs are individuals employable in both private and public companies. The CEO is answerable to the Board of Directors in a company. The responsibilities of a CEO vary depending upon the nature of the organization. 

One of the most typical responsibilities of a CEO is to act as a decision-maker on business strategy and other crucial policy issues. The CEO also looks after the day-to-day operations of the firm or organization. All and all, the CEO has the sole responsibility for the operations, marketing, human resources, finance, and business development. 

The term CEO connotes different positions in different countries. In the United States of America, a CEO is usually employable in business firms. In contrast, a CEO is a member of the local government in the United Kingdom. Moreover, the CEO is the head of the executive board in most countries. The objective of a CEO is to achieve a company’s target.

A CEO usually motivates the employees to ensure maximum productivity. They also can bring about considerable changes in the policies of the organization. The CEO of a company is usually not the owner of the company. Apart from that, the CEO of a political party plays a key role in fundraising. Thus, a CEO plays several important roles. 

What is an Executive Director?

An executive director is a member of the Board of Directors. However, the term stands for different positions of responsibility in different countries. In most situations, an executive director manages a company, organization or corporation. The term executive directors usually refer to the head of the non-profit organizations in North America.

An executive director serves to satisfy two major goals for the company: profit maximization and time effectiveness. The executive director also manages the staff and committees as well as takes responsibility for developing business plans. In most cases, an executive director is empowered by the board of directors to run the organization. 

An executive director not only looks after office-based work but also serves to motivate the employees in the organization. An executive director takes up the responsibility of developing the organizational culture as well. To be eligible for the post of executive director, an individual should have a masters in business education or equivalent, and highly ethical behaviour. 

 Some other chores of an executive director include drafting the policies of the organization, conduction of performance reviews, preparation of comprehensive budgets, a report on revenue and expenditure, and engaging with community groups. Moreover, an executive director also manages the financial accounts of the organization. 

Main Differences Between CEO and Executive Director 

  1. The CEO is accountable to the Board of Directors. In contrast, an executive director is answerable to the shareholders of a company. 
  2. The salary of a CEO is usually higher than that of an Executive Director. 
  3. A CEO is usually associated with business corporations and firms. On the other hand, the Executive Director is usually associated with non-profit organizations.
  4. Another name of CEO is the Chief Administrative Officer. On the other hand, another name of Executive Director is the Managing Director. 
  5. A CEO is not answerable to the shareholders of the company. In contrast, the  executive director is answerable to the shareholders of a company. 

Conclusion

Thus, a CEO and executive director vary on several grounds. A CEO looks after functions like handling meetings, building strategies, and bringing about considerable changes in policies of the organization. On the other hand, an executive director takes up the responsibility of developing the organizational culture as well.

A CEO and executive director both occupy positions of higher authority in an organization. A CEO resonates more with a company or a firm. In contrast, an executive director resonates more with non-profit organizations. Therefore, the CEO and executive director have considerable differences. 

References

  1. https://www.tronviggroup.com/executive-director-versus-ceo/ 
  2. https://bestaccreditedcolleges.org/articles/difference-between-ceo-executive-director.html 
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