Insights — Executive Recruitment — 3 min read
Commercial Director vs Managing Director
The boundary between these two roles is drawn by P&L ownership and board accountability — not by how commercial the Managing Director happens to be.
In short
A Managing Director owns the whole P&L and is accountable to the board or shareholders for the performance of the entire business. A Commercial Director owns the revenue side of that P&L — price, margin, terms, partners and bids — and is accountable to the Managing Director or the board for commercial outcomes rather than for operations, finance and people as a whole.
In owner-managed businesses the Managing Director is usually the most commercial person in the building. That is how the business got here. It is also why the boundary with a new Commercial Director is so often left undrawn — the work being handed over is work the Managing Director has always done personally.
The question is not who is more commercial. It is which decisions now need an owner other than the person running the whole business.
The dividing line is the P&L
| Accountability | Managing Director | Commercial Director |
|---|---|---|
| Full P&L | Yes — revenue, cost, overhead, profit | Revenue and gross margin only |
| Operations and delivery | Yes | Holds delivery to what was sold; does not run it |
| People and organisation | Yes, across the business | Within the commercial function |
| Shareholders and board | Primary accountability | Reports commercial performance; may hold a board seat |
| Strategy | Owns business strategy | Owns commercial strategy within it |
| Investment and capital | Yes | Advises on commercial implications |
The shadow Managing Director problem
When a Managing Director is stretched, the temptation is to hire a Commercial Director and hand over 'everything customer-facing plus whatever else you can take'. Six months later the Commercial Director is running operations informally, making decisions the Managing Director then revisits, and neither knows who the business answers to.
The fix is dull and effective: write down which decisions the Commercial Director makes alone, which they make with the Managing Director, and which remain the Managing Director's. Pricing policy, discount authority above a threshold, partner appointments and contract signature limits are the four that cause the most trouble when left implicit.
When the business actually needs a Managing Director
Sometimes a Commercial Director appointment is an attempt to avoid a harder conversation. If the owner wants to step back from running the business rather than from running the commercial side of it, appointing a Commercial Director will not deliver that. Operations, finance, people and supplier relationships will remain where they are, and the owner will remain as involved as before.
- The owner wants to reduce day-to-day involvement across the whole business — that is a Managing Director requirement.
- The owner wants to keep running the business but stop personally owning price, terms and key accounts — that is a Commercial Director requirement.
- The business is being prepared for sale and needs to demonstrate it is not dependent on the owner — usually a Managing Director requirement, sometimes sequenced with a commercial appointment first.
Sequencing the two appointments
Where both are eventually needed, appointing the Commercial Director first is often the lower-risk order. It removes the most time-consuming work from the owner, builds a commercial structure that a future Managing Director inherits rather than invents, and gives the board evidence about how the business performs with senior commercial leadership in place.
The reverse order — Managing Director first — makes sense where the pressing gap is general management, or where the owner's withdrawal is time-bound and already decided.
Board seats and reporting
A Commercial Director does not have to be a statutory director, and many are not. What the role does need is direct board exposure: presenting commercial performance, participating in the plan, and being present when price, investment and market decisions are made. A commercial leader who learns of board decisions afterwards cannot hold the accountability the title carries.
Discuss a Commercial Director requirement
Permanent, interim or fractional. The conversation starts with what the role must own — price, margin, terms and partners — rather than with a job title.
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Written by
International Sales & Market Development Director, Evans Sales Consultancy
Published 17 September 2026 — 3 min read