LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Definition of director

Shridhi Jain (Company Secretary) (1678 Points)

31 December 2011

Dear members,

I hv a lot of confusion regarding the definition of different kind of directors. Pls explain me the following queries:

1. Who is MD and ED and the difference b/w the two?

2. Who is Non ED and Independent Director and the difference b/w the two?

Pls provide me the comparison b/w the above four categories of directors.

Thanks in adv.

Shridhi

Reply
Follow
Share

2 Replies

Sanket (!..Live to Give..!) (16427 Points)
Replied 31 December 2011

1) A Managing Director is more senior but the exact difference depends on what job role you're looking at.

Generally a Director will be a senior Head of Department with line management and strategy responsibilities. Smaller support departments (ex: PR, Compliance or HR) will be led by a Director, larger more commercial departments (ex: Sales) will have several Directors reporting into a Managing Director.

Generally Managing Directors are the people who get to make all the important decisions about budgets and the future direction of the business. Both job roles can commit the business but there will be rules in place stating that contracts over a certain size have to be referred to a MD.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 31 December 2011

An MD is first required to be an director & then he can become the MD. The MD occupies the strategic postion of the company. He is responsible in managing the affairs of the co so he is called an MD. ED & MD are the same

non ED & Independent director are one & the same. They are not responsible for managing the affairs of the co & are not involved in the decision making process of teh co. So they are called as Independent directors. they only attend the meetings of the co & sitting fees for attending the meetings.