What Does a Managing Director Do? (And How to Become One)
Updated 25 March 2023
A managing director is a professional who works on the board of directors and oversees business operations such as finance and accounting. This is a senior position that requires experience and leadership skills to be successful. Learning how to earn this position may be crucial to your career plan and help you advance sooner in your career. In this article, we discuss the answer to the question, 'what does a managing director do', provide a step-by-step guide on how to become a managing director and offer information about the skills they use, their work environment and the salary you can earn as a managing director.
What does a managing director do?
The answer to the question 'what does a managing director do?' is that these professionals lead employees and manage company actions. Managing directors oversee the day-to-day operations of the company. These professionals often work in the finance industry, such as for investment banks. Managing directors report directly to company executives, so these professionals are high on the corporate chain of command. Some of the duties these professionals typically are responsible for include:
developing business ideas and plans
sharing advice with shareholders and board members
implementing business plans and policy changes
reporting to the company executives
making business deals with other companies or high-profile individuals
setting department goals
ensuring that company policies comply with local and international business laws
reading and evaluating performance reports
managing public relations
How to become a managing director
If you're interested in becoming a managing director, follow these steps:
1. Earn an advanced degree
The minimum education requirement to become a managing director is a bachelor's in business administration. Companies typically prefer candidates who have a master's degree in the subject. Business administration programmes often cover topics such as marketing, accounting, human resources, project management and business technology. When earning this degree, you can advance your business skills and learn more about the economic market and business management.
2. Get experience
Managing directors usually start out as investment bankers or other finance and business professionals. Earning such a position allows you to gain experience in the field and with the company. Many organisations prefer to promote from within, so it's often helpful to plan on staying with the same firm for multiple years, especially as you are further in your journey of meeting the position's requirements.
3. Meet the requirements
Before your superiors can consider you for the promotion, you may meet certain requirements. Though the qualifications to be a managing director can vary slightly depending on the company's policies, these professionals typically have the following requirements:
experience in a managerial role
experience with developing business strategies
knowledge of the economic market
understanding of corporate finance
knowledge in corporate law and company policy
bachelor's in business administration
master's in business administration (preferred)
communication skills, including public speaking
the ability to oversee an entire department
4. Gain a promotion
Once you're confident in your ability to fill this position, ensure that you express your interest to your supervisor. This prompts them to consider you for any upcoming promotions. Companies usually only have a few director positions available, so you may need to wait for a vacancy at the company for which you work, or search for job postings online.
While waiting to earn a promotion, try to stay productive and look for opportunities to exercise your leadership skills. This can reflect positively on you during performance reviews, which executives often evaluate when choosing a professional to fill the role of a managing director.
What skills do you need to become a director?
To become a managing director, it's important that you master a wide variety of skills to help you better perform your job duties. Here are some skills that directors commonly have:
Communication skills allow managing directors to update shareholders and executives on company operations and lead correspondence within the department for which they work. As a managing director, these skills can also help you work with clients and organise internal meetings. Often, managing directors handle public relations affairs as well, so strong communication skills can help you improve your public speaking skills.
Leadership skills are often essential for managing directors as they oversee daily business operations. These skills can help you advise other professionals and ensure that team members have the tools they need to stay productive. To develop your leadership skills, discover what your leadership style is and the type of management your colleagues may benefit from. You can also attend workshops and conferences to help you develop this skill.
Organisational skills can help you manage the operations of the department in which you oversee. This skill can also help you keep regular correspondence with other professionals and create an orderly work environment. You might also use organisational skills to file and update records for clients, employees and performance reports.
Financial management skills allow you to understand economic markets and make decisions for the company budget. This skill is especially important if you work in the finance or business field. Financial management skills include budgeting, accounting and auditing. Though you can develop this skill while pursuing your master's or bachelor's degree, it can also be beneficial to seek additional certifications to increase your skill level and qualifications.
Having advanced knowledge about the industry in which you work can increase your decision-making abilities and influence your management practices. Having this knowledge allows you to share advice and understand the business operations of the company for which you work. Often, you can earn this knowledge through your education programme and experience.
Business development skills include strategising to improve the operations of the business. This can include budgeting, marketing campaigns and company policies. As a managing director, you have the responsibility to create and initiate new business policies and practices to increase revenue and contribute to the company's success. To improve your business development skills, try to expand your professional network and develop a higher proficiency for problem-solving skills.
Project management skills can help you lead workplace initiatives and projects. These skills include delegation, knowledge of project management tools, the ability to motivate other professionals, goal setting and other similar skills. Having strong project management abilities can help ensure the productivity of the department you lead and the execution of the business's daily goals. Evaluate employee performance and utilise project management tools to help complete projects in a timely manner, which can also help improve client satisfaction.
Interpersonal skills are the abilities that allow you to connect and communicate with other people and professionals. As a managing director, having interpersonal skills is very important because they allow you to support your colleagues and connect with clients. Managing client relationships is often a large part of a managing director's responsibilities, and having strong interpersonal skills can help you accomplish this duty.
What is a managing director's work environment like?
A managing director is the most senior level manager role in a business. They work in office environments and oversee operations in finance, policy and business relationships. Managing directors are members of the board of directors and advise chairpersons for decision-making about business operations. They also communicate with stakeholders and may attend business lunches with them to maintain business relationships. Most often, the managing director doesn't travel and can perform all job duties on the premises of the company where they work.
How much do managing directors earn?
The average salary of managing directors is $824,758 per year. A professional's salary can depend on a variety of factors, including their location, employer, experience credentials and education level. You may increase your earnings by working in a densely populated area or for a higher profile company. With your salary, you may also get paid time off and sick leave. Depending on your work experience, education and special credentials, you may negotiate a higher salary with your employer.
Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.
Explore more articles
- What Does a Beauty Advisor Do? (Plus How-To Guide and Skills)
- How To Write a Job Application Email (With Examples)
- What Does a Storekeeper Do? Role and Responsibilities
- What Can You Do With a Master’s in Early Childhood Education?
- What Does a Retail Assistant Do? Duties and Career Steps
- How To Become a Freelance Accountant
- What Does a Customer Service Executive Do? Role and Skills
- 7 Best Delivery Jobs in Singapore (Plus Requirements)
- What Is A Marketer? Roles and Examples of Marketer Jobs
- What Does a Production Director Do? Duties and How-To Guide
- What Is a Virtual Internship? (With Skills and Tips)
- How to Become a Police Officer (With Steps and Scholarships)