What is the difference between a managing director and CEO? how are the titles chosen? is there any formal rule?
Thanks.
CEO = Chief Executive Officer - as in the “head honcho”, leader of the company
MD and everyone else = Under the CEO
Erm, actually, it depends
on the country
on the company
The conventions can vary
Here in the UK, the CEO and the MD(Managing director) are almost always the same.
The CEO/MD are then responsible to the Board of directors, who as a group are responsible to the ultimate boss of the company, the shareholders.
Shareholders can compel the board to discipline the CEO/MD, or compel the board to resign.
ceo/md is the designated highest level operational employee of the company, and he/she also sits on the board.
This can get fairly complex but, thats business 
clearly CEO is someone who has the global right to make decision in the company, while MD is quite gray, it depends on the company. How did they set term and liability.
location, location, location…
These terms, at least in the US, aren’t as flexible and ambiguous as some of you might think. The word ‘director’ can have specific meaning in a corporate context, usually referring to someone who has been granted a formal title in the articles/minutes of a corporation and has specific legal responsibilities as a result. They would have to participate in annual meetings, etc. just as an ‘officer’ would, and they are typically the same thing although larger companies will have complex structures in which they aren’t identical.
A Chief Executive Officer is specific corporate title that is applied to a principal of a corporation, specifically the chair/head of a board, so the use of that title implies that a corporate board exists as well as stockholders, etc. People who use the term CEO when no board exists (i.e. they are the single member/owner of a company and hold all positions) are using the term in a misleading way, and it could be argued that they are fraudulently using the title. Ironically this argument has been used in court to pierce the corporate veil of inexperienced business people who incorporated but didn’t take the legal requirements seriously enough.
Unlike the use of a corporate marker, such as Inc. or Corp., it isn’t actually illegal to use the title CEO but it’s dangerous if you are actually doing business because you are representing that you are doing business in a manner that you are not. So, it’s generally considered a sign of a new/immature business when an obviously single-person corporation has a CEO.
A managing director is less specific. The term ‘director’ can be used as a title for a company principal or owner, and can be applied to someone on the board, etc. However, that title can also be applied to someone who is strictly an employee. In larger companies, you’ll see titles like ‘Director of Online Marketing’ and those people are frequently NOT actual principals, stockholders, or directors of the corporation - they are employees. The term ‘managing director’ typically refers to a top-level employee who liaisons between the board OR is part of the board but also has day-to-day duties.
This term is also widely used for small/individual companies where a single person is holding all titles from the principals to the employees, and they need a title. For that purpose, it’s quite accurate because that person is technically a ‘director’ (principal) of the company and is an employee who is managing day-to-day affairs.
The ideal way to create a title for a single-person corporation or LLC is to create minutes that apply the title ‘director’ to the owner. Since the owner is, in fact, a principal of the company it’s honest and correct for them to use that word, and extending it to ‘Managing Director’ is also reasonable and a fair representation of that person’s role in the company.
I’m not an attorney but I have worked with lots of startups, so I’ve heard this question before and my attorney has clarified it for us. The above is the general idea of the concepts surrounding these terms. Most importantly, don’t forget that people will read your title and make interpretations, and it goes both ways - an unincorporated person who calls himself a ‘President’ would be seen as an amateur in many circles, etc.
Nice post Sagewing. People calling themselves CEO is a pet peeve of mine.
I’m going to second what Chris (aspen) said, especially about the pet peeve.