Director vs Executive Director: Difference and Comparison
By
Chara Yadav
Roles and Responsibilities in organisations are framed to attain clarity. It allows the employee to deliver his/her services without any inhibition.
Having said that, there will be responsibilities that may intertwine with different roles. The hierarchy in the system diversifies the decision-making authority in such instances.
In that context, the term director is confused in the organization. Also, the term Executive director is interchangeably used and causes more puzzles in referring to someone the right way.
Though a few responsibilities are similar for both roles, significant differences exist between them.
Key Takeaways
- A Director manages a specific department or area within a company, while an Executive Director manages an organization’s overall strategy and direction.
- Directors report to the Executive Director, while the Executive Director reports to the Board of Directors.
- Directors are responsible for implementing the policies and decisions of the Executive Director, while the Executive Director is responsible for setting these policies and making strategic decisions.
Director vs Executive Director
The difference between Director and an Executive director is that the Director of the firm need not be a full-time employee, while an Executive Director is an internal salaried employee of an organization. Though the directors are a part of the board of directors, the Executive Director heads the board.
The Director is a title offered to people who are in the leadership team of large corporations. This is a common term, and anyone who heads a particular department is also called a Director.
From a broader perspective, a Director is a part of the Board of Directors who help in taking unbiased and critical decisions for the organization.
An Executive Director is an internal member of an organization. He/She will head the board of directors and take part in the day-to-day activities.
The Executive Directors head a particular division of the company. The key responsibility of an Executive Director is to lead the department as well as the Board.
Comparison Table
| Parameters of Comparison | Director | Executive Director |
|---|---|---|
| Type | A Director might not be an internal team member. He can be hired on a part-time basis too. | The Executive Director belongs to the system and is paid a salary like every other employee in the organization. |
| Function | It helps in making vital decisions for the organization. | Heads a Department, the board and facilitates the decision-making process during the board meetings. |
| Categories | Directorship is categorized into Executive Directors and Non-Executive Directors. | Many Executive Directors exist in an organization, depending on the departments present. |
| Responsibility | Directors run the organization from the senior management point of view by making critical decisions for the company. | Executive Directors are responsible for their team, board as well as the company on the whole. |
| Role Change | Not Possible | Executive Directors will change themselves to Managers as they take care of their team. |
What is Director?
A Director is a broad term used in organisational culture that denotes senior management. Essentially in the leadership board, directorship has different categories in it.
- Executive Director
- Non-Executive Directors
A Director is a person who is hired from other organisations. He/She will be a part of the Board of Directors in facilitating new decisions without being biased against anyone or the situation.
The Director is not a part of the organization in terms of day-to-day activities. They help to make the best decisions in the interest of the organization during the board meetings.
As such, a Director can also be referred to as a person who heads a particular team. Such directors shall be reporting to the top management.
The directors, on the whole, are expected to have incredible experience in their niche. This offers expert advice from the top to the teams of the company.
The functionalities led by them shall be headed by a manager who will be reporting to the Director. The title is confused with other Directors, but the broader meaning of it is; leader.
The Director must abide by the special legal duties of the organization and will never bypass them in the event of making decisions.
What is Executive Director?
An Executive Director is a direct employee of the organization. He/She heads the board of directors and also one or a few teams.
The Executive Director pays close attention to the day-to-day activities and is one of his/her responsibilities. The executive director gets paid every month.
It falls under the typical salary norm with tax deductions in it.
The Executive Director is recruited to head a team and support them in taking it forward. Also, the position is the senior-most of the Directors too.
They run the board meetings and help other directors in coming to the right decision for the company.
There can be many Executive Directors in the company. They may differ in their functionalities, and the one who heads the board is the senior-most in the organization.
They also abide by the Taxation and legal norms of the government. The Executive Directors are responsible for
- The Team’s growth
- The Companies Growth
- The Board’s Decision
- Overall Welfare of the Employees
An executive director of a firm cannot deliver his duties to any other organization unless permitted by the employed one. They have different roles to be played while being in the company.
- A manager, while addressing and taking care of the team
- A leader while representing the company
- A thought leader while being the head of the Board.
Main Differences Between Director and Executive Director
- The main difference between Director and Executive Director is the former is not a direct employee of the organization, while the latter is an internal part of the system.
- The Director is a part of the Board of Directors, while Executive Director heads the Board.
- The Director need not work full-time with the company, whereas an Executive Director is responsible for the day-to-day activities in the firm.
- The Director is an experienced person who helps the Board take crucial decisions for the company. At the same time, the Executive Director helps the board to arrive at the right decision.
- The Director is a broader term referring to all types of Directors, while Executive Director is a specific term that denotes a leader who takes care of the team, board and the company.
- https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-8683.2005.00458.x
- https://www.tandfonline.com/doi/abs/10.1080/23303131.2016.1222976
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By Chara Yadav
Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
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