Executive Director – Role, Responsibilities and Qualifications

The term executive director is used to define a working director of a firm that can be either profit or a non-profit organization. He is a full-time employee and has a specific decision-making role in the firm.

An executive director is described as a member of the board of directors who handles management responsibilities. It is his duty to create, develop and implement all the plans in the company in a way that proves inexpensive and time-efficient.

He is accountable to the chairman and is the person who has to report to the board of directors for further guidelines. The executive director is also entrusted with the daily operations of the firm. It is not necessary for an executive director to attend every board meeting but he has to keep the board informed about other employees and about the strategic plans to reach set targets.

An executive director adds value to his firm as he has

• Greater knowledge about the strategy that needs to be implemented and the direction that the company needs to take
• He has direct and greater access to information and data that can help him in making decisions quickly and easily
• His technical expertise in functional areas is at par with an expert
• His knowledge about the industry he belongs to helps him in dealing with competitive pressures easily
• His understanding of a situation ensures swift action that benefits the company.

Who is an executive director?

The executive director is also the senior-most operating person in a firm. He is responsible for operating within the approved budget, making strategic plans and working with the board of directors. In a non-profit organization, he handles promotional activities as well as fundraising efforts to increase public awareness.

The executive director is accountable to the board of directors and he is the one who carries out their directives and decisions. In profit organizations, the executive director is generally known as CEO whereas in non-profit organizations he is known as executive director.

Qualifications of an executive director

Qualifications and skills required for the post of an executive director are-

• Master’s degree in business administration or an advanced degree in any relevant field
• In-depth knowledge of performance metrics and financial strategies
• Ability to create and execute strategic plans
• Knowledge about good governance
• Aptitude for written and verbal communication that will help in maintaining a healthy relationship in the workplace
• Understanding of management practices
• Previous experience preferably 7+ years gained via a leadership role
• An analytical mind that is capable of thinking on his feet
• Good leadership and organizational abilities
• Innovative approach

Role of executive director

The role of an executive officer is varied and is dependent upon the position he is assuming. For instance-

As a leader he

• Takes up the leadership mantle with ease
• Promotes change related to the mission of an organization
• Motivates and mentors staff members
• Chairs meetings
• Develops organizational culture
• Offers advice to the board
• Offers guidance to other executives
• Ensures up-to-date information is given to the board members and other staff members
• Is the point-of-meet between employees and board members
• Is the point-of-meet between community and company

As a manager he –

• Manages human resources
• Oversees the head of each department
• Handles financial decisions
• Oversees and handles daily operations of the firm
• Implements all the strategic plans
• Manages physical resources

As a board developer he

• Offers support to the board’s evaluation
• Offers assistance during the selection of board members
• Makes recommendation to the board
• Offers support during self-evaluation and orientation

As a decision-maker he

• Decides on an action plan and then implements it with the help of other staff members
• Makes recommendations to the board
• Creates and plans policies for the welfare of the company

Responsibilities and Duties of an executive director

The duties and responsibilities of an executive director are as follows-

• Planning and executing company strategies
• Handling daily activities of the organization
• Making sure legal guidelines are followed and ensuring compliance with all applicable laws across the company
• Offering support to the board by keeping it in the loop
• Overseeing external communication, for instance, social media content, newsletters, marketing materials, and website
• Establishing long-term policies of the firm
• Overseeing quality, delivery, marketing and designing of products, services, and programs
• Reviewing reports of subordinate managers
• Managing investments
• Ensuring that a positive brand image is presented to the public and the relevant stakeholders
• Managing human resources
• Recommending the budget every year for the approval of board members and managing the resources of a firm as per the set guidelines
• Participating in external events to boost credibility, visibility, and image of the brand.
• Making strategic plans to improve and increase community awareness
• Overseeing fundraising efforts by identifying resource requirements, approaching funders, submitting proposals and implementing strategies along with proper documentation of all the steps
• Developing business plans
• Offering guidance to subordinates
• Acting as a representative of the organization
• Building a team of effective and efficient leaders
• Managing a diverse staff, community, and clients
• In-depth understanding of the non-financial and financial position of the firm
• Maintaining good relationship with partners, shareholders, and employees
• Handling issues with remedial actions to protect business interests
• Develop strong teams to handle critical business functions

Difference between an executive director and a non-executive director

Both the executive and non-executive directors of a firm have the same liabilities, responsibilities and legal duties within a company. Both have fiduciary duties and thus place the interest of the board above their own.

Both executive and non-executive directors have to accept the board decisions even if they were initially against it. In spite of being board members, there are numerous differences between them.

Executive director	Non-executive director
An executive director is a board member with management responsibilities	A non-executive director is a board member without management responsibilities
He is a full-time employee with a salary in an organization	He is not a full-time salaried employee of a firm
A person can be executive director in one company at a time	A person can be a non-executive director of more than one firm at a time
It is not compulsory for an executive director to attend the board proceedings	The non-executive directors generally make time to attend board meetings
An executive director is appointed to the board by the board of directors or through a nomination committee	A non-executive director is appointed through a letter of appointment
An executive director must have extensive knowledge and skills to take up the leadership role in a business	The non-executive director has a less hands-on role and it is not compulsory for him to have expert knowledge and skills
Executive directors are considered doers as they have to take a hands-on approach	Non-executive directors are considered over-viewers and advisors in the board
The directorship is for long-term	The directorship is for a fixed term
The executive director has a vested interest in the company	The non-executive director does not have a personal interest in the company
An executive director can face the issue of conflict of interest	A non-executive director is objective in his dealings
The executive director cannot monitor the activities of non-executive director	The non-executive director can monitor the activities of executive directors
The executive director is part of the executive team	A non-executive director is not a part of the executive team
Executive directors have a relationship with the employees of the company as they have to work together in planning and implementing strategies	Non-executive director remain neutral and do not encourage a relationship with other employees of the firm
The executive director takes part in daily activities	The non-executive director does not take part in daily activities
The executive director is hired from within the company	A non-executive director is hired from outside the company