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Managing Director (m/f/d)
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What is a managing director?
Definition and overview
A 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 goal is always to advance the company's business purpose and take responsibility for the business and its employees.
The exact duties and authorisations 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 tasked with managing the company are responsible for the strategic direction of the company and have the highest level of authority 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 GesbR (civil law association), all shareholders are also managing directors and have unlimited liability with their private assets.
What is the difference between managing directors under commercial law and managing directors under trade law?
The managing director under commercial law is responsible for the general management and external representation of the company. This person is appointed by the shareholders of the GmbH and does not need to have any special qualifications, except that they must be fully capable of acting. The main task of managing directors under commercial law is to manage the company's business internally and at the same time represent it externally. In terms of liability, the managing director under commercial law is primarily responsible to the company and is only liable to third parties in exceptional cases.
In contrast, the management under trade law is specifically responsible for compliance with trade law regulations. This person must fulfil certain personal requirements, such as a certificate of competence for the respective trade. The managing director under trade law must also be able to work in the business accordingly and have the authority to issue orders. The main task is to ensure that all legal requirements relating to the business are fulfilled. In terms of liability, the managing director under trade law is responsible both to the trade owner and to third parties for compliance with trade law regulations.
What does CEO mean in Austria?
Managing Director Salary Austria:
What does a managing director earn?
There is no upper limit to the salary of a Managing Director. As a rule, the management earns the highest salary within a company. However, the exact amount earned depends very much on the size of the company, the industry and the annual turnover.
Austrian Managing Directors of companies with up to 50 employees earn an average of around €120,000 per year. In companies with up to 300 employees, this figure rises to between €150,000 and €200,000 gross per year.
The salary is made up of the monthly basic salary, as well as bonuses and non-monetary compensation. At the end of the year, Managing Directors often receive a bonus of 50% to 100% of their salary. A company car is also one of the usual additional benefits for Managing Directors.
In a GmbH (LLC), the shareholders' meeting decides how much a Managing Director earns. The sole shareholder on the management board therefore also decides their own salary.
Managing director tasks:
What does a managing director do?
The tasks of the Managing Director 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 Managing Directors 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 management takes care of the economic and operational progress of the company and bears most of the responsibility. It ensures that employees are able to fulfil their tasks and understand the meaning behind them. At the same time, it 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.
Strategic planning: The Managing Director is responsible for developing and implementing the company's long-term strategies and goals.
Corporate culture: It characterises the corporate culture and ensures that it reflects the values and goals of the company.
Compliance and risk management: The Managing Director ensures that the company fulfils all legal and regulatory requirements and identifies and manages risks.
Customer relationships: The Managing Director maintains relationships with important customers and partners.
HR management: A Managing Director hires qualified staff, promotes their development and ensures a positive working environment.
Financial management: Monitors the company's financial performance, ensures that it is profitable and makes decisions on budgets and investments.
Duties of the Managing Director
In addition to tasks such as managing employees or making decisions about investments in new machines, a Managing Director also has certain duties. These duties are set out in various legal codes or in the management contract. These include, for example, convening the shareholders' meeting or duties of disclosure and information, as well as compliance with the duty of care towards employees.
Furthermore, 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 operations 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 in Austria and appoint themselves as Managing Director. An alternative is the appointment as Managing Director by the shareholders of a company.
Nevertheless, the reality is that the Managing Director 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 in the course of their career or founds a company themselves after a few years of professional life. This process requires a lot of discipline and experience, as a career in management is difficult without the necessary expertise.
In principle, the shareholders decide who takes over the position as Managing Director of the company. Accordingly, they also decide which requirements must be met.
Training as a Managing Director
Training in business administration or commerce forms 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.
Nevertheless, there are now also degree programmes that prepare interested individuals for the tasks and challenges of management.
Possible degree programmes for prospective managing directors in Austria:
- Entrepreneurship & Applied Management at the FH Wiener Neustadt
- Global Executive MBA at WU Vienna
- Master of Business Administration (MBA) at the University of Seeburg Castle
- Project work
- Legal knowledge
- Marketing
- Accounting
- Communication
- Behaviour within the company and towards persons and institutions not belonging to the company
- Organisation
- Employee leadership and personnel management
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 Managing Directors.
In addition, a Managing Director should set a good example and promote continuous training for employees.
Possible further training for Managing Directors:
Leadership and leadership skills
Industry-specific training
Negotiation skills
Cyber Security
Rhetoric and presentation
Change management
Difference between management and executive management
An employed Managing Director has the same duties and obligations as non-employed Managing Director. Only in some cases, which must be considered individually, does he/she count as an employee and can therefore also refer to the rights of employees. For many years, case law has been asking the question of whether Managing Directors are considered employees or employers.
In contrast to other employees, a employed Managing Director, i.e. an external Managing Director in a GmbH (LLC), is liable with their private assets - just like a non- employed Managing Director. Nevertheless, Shareholder-Managing Directors often have more power in the company, as they are also shareholders.
The Managing Director must be employed at least 25 hours per week per company.
Difference between shareholders and Managing Directors in a GmbH (LLC)
Although one person can fulfil both roles, there are certain differences between shareholders and Managing Directors. Shareholders participate in both profits and voting rights and are considered shareholders of a GmbH (LLC). 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, the Managing Director also legally represents 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 a Managing Director, it is important to agree a Managing Director contract. This avoids conflicts with other shareholders and the tax office.
Skills of managing directors
A CEO needs a variety of skills that include both hard skills (technical or specific skills) and soft skills (interpersonal or personal skills). These skills enable them to lead the organisation effectively, make strategic decisions, manage 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 Managing Directors are:
Commercial and business management skills
Knowledge of trade lawIT skills
Analytical thinking
Sound knowledge of the industry
Project management skills
Strategic understanding
- Leadership qualities
- Communication skills
- Problem-solving ability
- Stress resistance
- Time management
- Teamwork
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FAQ
How much a Managing Director earns depends heavily on the industry and the size of the company. Managing Directors in Austria often earn between around €120,000 and €500,000 gross per year.
How much a Managing Director earns depends heavily on the industry and the size of the company. Managing Directors in Austria often earn between around €120,000 and €500,000 gross per year.
As a Managing Director, you manage the company, make strategic decisions and is responsible for achieving the company's goals. They 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 is responsible for achieving the company's goals. They also coordinate the various departments, ensure that company guidelines are adhered to and represent the company externally.
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 Austria.
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 Austria.
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.
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