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Managing Director (m/f/d)

Being a managing director and managing a company strategically and operationally is a major career goal for many people. But what does a managing director actually do and what rights and duties does the person in the top position have? How much does a managing director earn and what are the differences between the various types of company? We shed light on these questions and much more in this job profile.  

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Are you looking for a Managing Director job? 

Many companies are looking for qualified individuals who are willing to take a proactive approach to management and leadership. Are you ready to join the management team and drive the business forward profitably? If so, you can find vacant management positions on our job board now. 

Are you looking for an experienced and competent Managing Director? 

Are you looking for the person who will drive your company forwards in a targeted manner and take the role of management seriously? We have the right candidates for this responsible role and know who is suitable for your industry. 

What is a Managing Director? Definition and overview

The managing director is the highest level of management within a company and also officially represents this company to the outside world. The management can consist of one or more natural or legal persons. Their primary objective is always to drive forward the company's business purpose and take responsibility for the business and its employees. 

The exact duties and powers of the management depend on the respective company form. The term "managing director" is therefore not a protected job title that can be clearly defined.  

In principle, the people who are entrusted with the management are responsible for the strategic direction of the company and have the highest level of expertise and responsibility. 

The management of a GmbH (limited liability company) usually consists of one or more managing directors who are appointed by the shareholders. They are not personally liable for the company's liabilities, but represent the company both in and out of court. 

In contrast, the management body of an AG (public limited company) is the Management Board, which is appointed by a Supervisory Board. The Management Board is not personally liable, but must act in the best interests of the shareholders. It acts alongside other bodies such as the Supervisory Board and the Annual General Meeting. 

In a Gbr (Gesellschaft bürgerlichen Rechts), all partners are also managing directors and have unlimited liability with their private assets. 

What does CEO mean in German?

CEO stands for Chief Executive Officer and usually refers to the managing director of a public limited company. The English term CEO originally comes from North America and is now also frequently used in Germany and Europe. In addition to the CEO, there may also be other board members who are responsible for finance (CFO) or marketing (CMO), for example. 

Managing Director salary: What does a Managing Director earn?  

There is no upper limit to a managing director's salary. As a rule, the management earns the highest salary within the company. However, the exact amount earned depends very much on the size of the company, the industry and the annual turnover. 

Managing directors earn the highest salaries in the pharmaceutical, automotive and chemical industries. There, an annual gross salary starts at around €200,000. 

In medium-sized companies, managing directors aged between 40 and 50 earn a salary of around € 170,000 per year. Managing directors over 60 often earn over € 240,000 gross per year. 
The salary is made up of the monthly basic salary, as well as bonuses and gratuities such as a Christmas bonus. 

In a GmbH, the shareholders' meeting decides how much a managing director earns. The person who is the sole shareholder in the management therefore also decides their own salary. Nevertheless, caution is advised: If a managing director's salary is too high, there is a risk of a hidden profit distribution. In principle, a managing director may receive around two and a half times the salary of the highest earning employee. 

In the case of an AG, the Supervisory Board may be liable if the salary of the Management Board is too high.  

Managing Director tasks: What does a Managing Director do? 

The tasks of the Executive Board are primarily the strategic orientation of the company, as well as the control, organisation and management of the company and its employees.  

The daily tasks of a managing director can vary depending on the size of the company. In very large companies and groups, top management is often divided into different areas, such as finance, marketing and sales. 

The managing director is responsible for the economic and operational progress of the company and bears the majority of the responsibility. He ensures that the employees are able to fulfil their tasks and understand the meaning behind them. At the same time, he ensures that the company remains healthy and delegates management tasks to other managers in the various departments.  

A large part of the management's tasks also involves representing the company to the outside world. Managing directors often come into contact with customers, competitors or the media. They must therefore be able to present themselves and the company in a positive light. 
The most important tasks of a managing director include:
  1. Strategic planning: The management is responsible for developing and implementing the company's long-term strategies and goals.
  2. Financial management: monitors the company's financial performance, ensures that it is profitable and makes decisions on budgets and investments.
  3. Personnel management: The Managing Director recruits qualified staff, promotes their development, ensures a positive working environment and takes care of personnel management.
  4. Customer relations: The Managing Director maintains relationships with important customers and partners.
  5. Compliance and risk management: The management ensures that the company fulfils all legal and regulatory requirements and identifies and manages risks.
  6. Corporate culture: It characterises the corporate culture and ensures that it reflects the values and goals of the company.

Duties of the management 

In addition to tasks such as managing employees or investing in new machines, the managing director also has certain duties. These duties are set out in various legal codes or in the managing director's contract. These include, for example, convening the shareholders' meeting or duties to provide information, as well as complying with the duty of care towards employees.  

In addition, the managing directors are obliged to minimise risk and preserve capital. To summarise, one of their greatest duties is to drive the business and its operation forward profitably. 

How do you become a Managing Director?  

Neither a degree nor special training is required to become a managing director of a company. In principle, any natural person with legal capacity can set up a company and appoint themselves as managing director. An alternative is to be appointed as managing director by the shareholders of a company. 

Nevertheless, the reality is that management is expected to have a great deal of professional experience and often an academic degree. They need an understanding of business management and must have an in-depth understanding of both the industry and the product or service offered. Normally, the prospective managing director works their way up during the course of their career or sets up their own company after a few years in the profession. This process requires a great deal of discipline and experience, as a career in management is difficult without the necessary expertise. 
 
If the managing director is not himself a shareholder or owner, he is an external managing director. In this case, he himself counts as an employee to some extent, as he is subject to the instructions of the shareholders. For this reason, he is also affected by all labour protection issues. 

In principle, the shareholders decide who takes over the management of the company. Accordingly, they also decide which requirements must be met. 

Training as a Managing Director

Training in business administration or commerce is a good basis for a career as a managing director. Studies in these fields also provide a good starting point for the prospective managing director. 

This is usually followed by several years of professional experience and further training before it is time for the top position in the company. 

Further training as Managing Director 

Further training is extremely important for managing directors. This is because topics such as leadership, project management as well as business and legal knowledge are essential for management.
 
In addition, the Managing Director should set a good example and promote continuous further training for employees. 
Possible further training for managing directors: 
  • Leadership and leadership skills
  • Change management
  • Rhetoric and presentation
  • Cyber Security
  • Negotiation skills
  • Industry-specific training
There are now many specific training courses for managing directors, such as the "Excellence Programme for Managing Directors" at the Frankfurt School of Finance and Management or the online training course "GmbH Management" at the Chamber of Industry and Commerce.

Difference between Management and Executive Management 

The terms management and executive management are often used interchangeably, but there are subtle differences. Management generally refers to the people appointed by a company's shareholder or supervisory board to manage and administer the company. They are responsible for the strategic direction of the company and make important decisions. 

Senior management, on the other hand, can comprise a wider range of managers, including the management but also other senior employees such as department heads or division heads. They are responsible for implementing the strategies and objectives set by the management. 

In smaller companies, these roles can often be filled by the same people, whereas in larger organisations there is a clearer separation between management and executive management.  

What is a salaried Managing Director? Advantages and differences 

An employed managing director has the same duties and obligations as non-employed managing directors. Only in some cases, which must be considered individually, does he count as an employee and can therefore also refer to the rights of an employee. For many years now, case law has been asking the question of whether managing directors are considered employees or employers. 
In contrast to other employees, a salaried managing director, i.e. the external managing director in a GmbH, is liable with his private assets - just like a non- salaried managing director. Nevertheless, a shareholder managing director often has more power in the company as he is also a shareholder. 

Difference between a shareholder and a Managing Director in a GmbH 

Although one person can fulfil both roles, there are certain differences between a partner and a managing director. Partners participate in both profits and voting rights and are considered shareholders of a GmbH. Managing directors, on the other hand, are part of the management and - as already mentioned - can also be seen as employees in some cases. Nevertheless, managing directors also legally represent the company internally and externally. 

Both roles can be performed by just one person or by several people. If a partner takes on the role of managing director, it is important to agree a managing director service agreement. This avoids conflicts with other shareholders and the tax office. 

Skills of a Managing Director 

A managing director needs a variety of skills that include both hard skills (technical or specific skills) and soft skills (interpersonal or "people" skills). These skills make it possible to manage the company effectively, make strategic decisions, lead teams and lead the company to success. 
Hard skills are specific, measurable and teachable abilities that are acquired through formal training and practice.

Some of the most important hard skills for a managing director are: 

  • Commercial and business management skills
  • Strategic understanding
  • Project management skills
  • Sound knowledge of the industry
  • Analytical thinking
  • IT skills

Soft skills, on the other hand, refer to personal characteristics and interpersonal skills that enable a manager to interact and work effectively with others.

Some of the most important soft skills for a managing director are: 
 

  • Leadership qualities
  • Communication skills
  • Problem-solving ability
  • Stress resistance
  • Time management
  • Teamwork
  • Willingness to travel

Top vacancies for Managing Directors: Jobs throughout Germany  

FAQ

What does a Managing Director earn?

How much a managing director earns depends heavily on the industry and the size of the company. Managing directors often earn between around €170,000 and €240,000 gross per year.
How much a managing director earns depends heavily on the industry and the size of the company. Managing directors often earn between around €170,000 and €240,000 gross per year.

What do you do as a Managing Director?

As a managing director, you manage the company, make strategic decisions and are responsible for achieving the company's goals. You also coordinate the various departments, ensure that company guidelines are adhered to and represent the company externally.

As a managing director, you manage the company, make strategic decisions and are responsible for achieving the company's goals. You also coordinate the various departments, ensure that company guidelines are adhered to and represent the company externally.


Is the Managing Director the boss?

The managing director is often also called the boss and is responsible for the strategic and operational management of a company.

The managing director is often also called the boss and is responsible for the strategic and operational management of a company.


What else do you call a Managing Director?

The role of the managing director is often referred to as CEO (Chief Executive Officer). The word comes from the English language and primarily refers to the chairman of the board of a public limited company. The term has now also become established in Germany.

The role of the managing director is often referred to as CEO (Chief Executive Officer). The word comes from the English language and primarily refers to the chairman of the board of a public limited company. The term has now also become established in Germany.


What responsibilities do you have as a Managing Director?

The managing director has the great responsibility of managing the company profitably and offering all employees a secure job. Strategic development and ensuring success are therefore particularly important.

The managing director has the great responsibility of managing the company profitably and offering all employees a secure job. Strategic development and ensuring success are therefore particularly important.