This article aims to understand the similarities between a director and an executive and determine whether a director is an executive. The aim is to define the Director Roles, the executive’s roles, the links between them, and use this information to conclude if the director is an executive.
Director as a word is used on different individuals from different life works, for example, move directors and so on. Still, in this article, we will be focused on directors in the business and nonprofit organizations. In this context, most of the directors are either appointed or voted in by members of the organization’s board of directors to oversee the organization’s day-to-day running. A director can be said to be someone elected, appointed, or promoted through ranks to a board member or oversee the organization’s date to day running. There are many types of directors, but we will discuss just two: the executive director and the non-executive director.
- Executive Director: This director is responsible for managing the assets and individuals in the business or organization. He is also involved in signing and entering into contracts on behalf of the organization.
- Non-Executive Director: This set of directors works part-time but is consulted because of their expertise in contributing to specific projects. These directors also attend board meetings.
Director Roles and Duties
The following are some of the duties of a director.
- Duties to Aid the Success of the Organization. The organization’s success depends on the relationship or rapport between the director and other players such as the shareholders, employees, suppliers, and clients.
- Fiduciary Duty/Relationship: The director is in charge of the company’s assets and as such is equipped with the responsibility to act on behalf of the organization. He/she is expected to act in ways that will represent the interest of the organization.
- Duty of Care and Skill: Directors are expected to exercise some level of care, diligence and skills. They are expected to be reasonable in their attitudes and approach towards things.
- Conflict of Interest: Directors should possess some level of principles that will guide them not to allow a conflict of interest. They should not allow their personal interests to come ahead of the company’s interests.
- Duty Not to Accept Secret Benefits: Directors are not allowed to collect any gift both in cash and kind about a transaction performed on behalf of the organization. Every activity or decision made by the director is made on behalf of the organization.
An executive in an organization is responsible for planning directing, coordinating the organization’s activities, and creating policies and strategies for the development of the organization. Some of the executive titles are but are not limited to Chief Executive Officer, Chief Operating Officer, Executive Director, Chief Information Officer, Chief Marketing Officer, President, and vice president.
Duties of Executive
- Creating Corporate Policies: They are responsible for drafting corporate policies and also oversee and make sure these policies are effectively implemented.
- Negotiating Contracts: They are bestowed with the authority to enter and negotiate contracts for the organization they represent.
- Finance Related Activities: They are responsible for all the organization’s financial activities, from budgeting to analyzing financial statements.
- Delegation of Responsibilities: They are also responsible for the delegation of duties to other members of the organization and also ensure that the duties are carried out effectively.
The executives of an organization are the people who come together to make profitable decisions. They are made up of a group of people, mainly members of the board or top-tier management. Directors are individuals who are members of the governing body of the organization. They appoint individuals to oversee the organization’s activities, either as the executive director or chief executive officer. The executive director is responsible for representing the ideas and initiatives of the board of directors. In the United States of America, both the executive director and chief executive officer address the same position or individuals carrying out the same duties.
Having gone through most of these explanations and duties of both the director and executive, it is important to understand that a director is a member of the executive, either appointed or voted to supervise the organization’s affairs on behalf of the executive board. The executive director exercises the same responsibilities as the chief executive officer, but this term is often used in a non-profit organization. The CEO is the person who plays the role of the executive director in a profitable organization. Whether with the executive title or not, directors generally are all members of the board of directors. The board of directors is the organization’s executive body, which automatically makes the directors members of the executive.
Is a director an executive?
Yes, a director or an executive director is the head of an organization like the CEO but usually in a non-profit organization that plays the role of the chief executive officer and protects the shareholders, directors, employees, and consumers. The executive body involved with presiding over the organization’s affairs is made of different directors as its members. The executive director makes quarterly or annual reports to the executive body, briefing them on the strategies and outcomes of the strategies he used. The board can exercise the duty of suggesting ideas on the improvement of the organization. Still, the executive director holds the people to decide whether or not and how to implement these ideas. It should not be confusing because the executive comprises different senior management, hired directors, and specialists who make decisions and suggest these decisions to the director. Because everyone can’t be the head of an organization simultaneously, the director is appointed from the executive members to act as the figurehead and major decision-maker and implementer, but that does not remove his position as a member of the executive.