What is an Executive Director?

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What is an Executive Director?
Ahmad Sultan Abdulla, Member
In the hierachy of the structure, where does the executive director play - From where are his/her roles and power derived? Does the executive director report to the CEO or to the board?

Executive Director
Michael Peacock, Member
The Executive Director would report to the CEO.
While some would compare it to a CEO I would disagree. Where as a CEO in my view is more of a visionary, creative type, the exec. dir. is more of a manager.
In the non-profit sector this is the title people like to use to deflect away from a more business sounding title.
Can or would the president of a company be on par to the executive director?

Executive Director
Executive director is synonym to CEO.

Executive Director versus CEO
meena, Member
According to my emperical experience and knowledge, in the organisational chart (structure) the position of CEO stands at the top. The CEO has control over each and everything through various directors and managers.

Executive Director Compliments CEO
Michael Peacock, Member
It is my view that the executive director would be like a division leader who would be able to make decisions for that area of the business. This is why I say that the executive director would be like the president not the CEO who sets direction.
As I work at rebuilding a company I can see myself placing people in the role of executive director over a certain division. Now we must look at the way we structure our company and if we have multi units with executive directors that report to a CEO than they (the E.D.) would be like a president of a business unit.

CEO versus Executive Director
Ahmad Sultan Abdulla, Member
Michael, thank you for the comment. I agree and see in the same light that ED is similar to a President of a sector comprising of several business units. In a public listed company, he may also sit in as a Board of Director member, but in the business operations he reports to the CEO. In an organisation with various titles, sometimes it could be complicated to benchmark who is greater then whom.

CEO versus Board of Directors
Mani Kumar Singh, Member
The CEO is the nervous system for any organisation. He is the person who looks after, guides, supervises the various departments in an organisation, and he is the person who informs the board regarding any changes.

CEO and Executive Director
Is there anybody who can specify public companies in which 2 different executives hold these two offices?

Executive Director versus CEO
Mohammed Asif, Member
For a company to succeed, it is necessary that both the ED and the CEO work in rhythm.
1. The executive director heads the board of directors.
2. The CEO is superseded by the board of directors.
According to the generally accepted standards, the board of directors forms the top rung of a company structure. This board is succeeded by a Chief Executive Officer (CEO), who is the leader of the pack down the line. He is the general manager of all the general managers plus some more.

CEO versus Executive Director
Ahmad Sultan Abdulla, Member
In my view the head of the board of directors is the chairman of the board, not executive director. I can only assume why one is called "executive director" is because other than being a member of the management, he is also represented in the board as a member of the board. A case example would be British Petroleum (BP) organisational structure.

Executive Director versus CEO
Mohammed Asif, Member
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 CEO 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.

What is an Executive Director?
Andrew Parker, Member
In answer to the question, in countries that operate Executive Directors, an Executive Director (ExDir) is any employee of a company that is promoted as an employee to a Directorship role on the board. However; as an Employee, an ExDir has no voting rights.
An ExDir will only have Executive powers to direct any task the Non- Executive Directors assign to the ExDir .
Non - Executive Directors are normally drawn from the Major shareholders of the Company.
In some organisations the term CEO is the equivalent of the term ExDir, and again is normally occupied by an employee, not a major shareholder.

Direction and Management
Andrew Blaine, Member
@Andrew Parker: Surely, an executive director plays a part in the day to day management of the company, thereby expanding their contribution to include both directing and managing. In my experience, and in terms of law here, a Director must hold shares in a company, although I have come across an instance where an accounting consultant was appointed to the Board as a Director - specialist input, I suppose?

The Meaning of Various Board Level Titles
Ahmad Sultan Abdulla, Member
@Andrew, public listed companies in Malaysia have what we call independent and non independent directors and we also have non-executive directors and executive directors:
- Non-executive directors do not work in the company, and
- Executive directors work in the company.
These directors may or may not hold shares in the company.
- Independent Directors do not hold shares but are appointed into the board for their expertise and wisdom and add diversity to the board's knowledge. They are not aligned to any shareholder and thus independent in their views.
- Non-independent means they have relationship to the shareholders who have appointed them into the board. So, their views are aligned to specific shareholders.
Hope this adds more knowledge in this area.


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