Difference Between Executive Director & Non-Executive Director

May 30, 2020

Comparing Executive Directors to Non-Executive Directors

The hierarchy of some organizations can be complicated. Employee titles help in maintaining order, and this is also true for those on director boards. In the following descriptions, you'll find that executive and non-executive directors both sit on boards of companies, but non-executive directors do not share responsibilities in the daily workings of the company.

Job Title Educational Requirements Median Salary (2019)* Job Growth (2018-2028)*
Executive Directors Bachelor's Degree $184,460 -5% (chief executives)
Non-Executive Directors Bachelor's Degree $104,960 6% (top executives)

Source: *U.S. Bureau of Labor Statistics

Responsibilities of Executive Directors vs. Non-Executive Directors

Boards aim to make decisions for an organization, including staffing and budgeting. Those who sit on the board also have other responsibilities. Executive directors, for example, maintain relationships with their employees and those in the community. Non-executive directors aim to remain neutral and make changes or give advice to the company.

Executive Directors

Executive directors work with other members of the board to make pivotal changes to the goals and strategies of a company. Because they work within the company on a daily basis, it is up to them to keep the rest of the board updated on the activities of the organization. They also support community outreach and fundraising efforts, as well as allocate the finances to departments in a fair and ethical way. It is the job of the executive director to be knowledgeable of the newest developments in the field to keep the organization on the cutting-edge of the newest trends.

Job responsibilities of an executive director include:

  • Encouraging others to join the board and have a say in the strategy that is created
  • Publishing memos and newsletters that inform the community on the activities of the company
  • Preparing a budget that reinforces the priorities and values
  • Ensuring that the organization conforms to federal and state regulations

Non-Executive Directors

Non-executive directors are appointed to the board of a company to make changes and give advice. Not only are they responsible for assessing the effectiveness of management, but they also examine the financial statements and assess any risks. This is why they first make sure the financial information they have is correct. During board meetings, non-executive directors suggest new company values and challenge old ones. They also set strategic aims for the company to increase revenue, create relationships with other organizations, and improve the public image. To do their job, they should remain separate from shareholders and others who have high stakes in the company.

Job responsibilities of a non-executive director include:

  • Ensuring that the employees are receiving continued professional development
  • Sitting on subcommittees to gain a sense of the wider company and the needs of the employees
  • Negotiating and approving the appointment of chief executives, executive directors and other leaders
  • Meeting with other non-executives

Related Careers

If you are considering a position as an executive director, another profession to explore is that as a certified financial manager, because both are focused on the budget and earnings of the company. Those who are pursuing a career as a non-executive director might also look at human resources management, as both of these positions are responsible for finding and retaining the best talent for a company.

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