Company Director Roles and Responsibilities

The company acts within two parties of people :

  • The Directors
  • The Shareholder

The Company Director:

The role of the company director is to manage day to day business of the company and make operational decisions to ensure the company meets its statutory obligations. While forming the company you must read the below guide to get exact picture about the role the Company Director. The Company director is appointed or elected by the board of members. He/ She is responsible for the company to make sure that all the standard operating procedure are in line. His/ Her decisions are based upon powers given to him/her by the board of Directors which should be in line with the corporate legislation and the company’s Article of association. In a s small company which has one Director, for example, the Director awards themselves powers in accordance with the Companies Act. In Conjunction with sound judgement and understanding, a company director should work to make a company successful by supporting and achieving its business goals.

Role of Company Director :

Where a company has more than one Director, each company director must act together as a “board of directors” but in few cases the board may delegate particular powers to a board committee or to an individual company director. These roles are set out by the Companies Act 2006, which are detailed in the company’s articles of association. According to the Companies Act 2006, The company director must follow the following:

The Director Powers:

A director must comply with the company’s constitution and work within the powers delegated to him by the board of Directors.

Duty to promote the success of the Company:

Making sure that the Company’s business objectives to achieve profit are actively pursued. As per the legislation: that a director must have regard to, but not limited to, the following:
  • Evaluate the possible outcomes of any decision in the long term.
  • Keep in mind the benefits of the company’s employees.
  • Ensure smooth implementation of the company’s business relationships with suppliers, customers and others.
  • Evaluate the company’s business impact on environmental and community operations.
  • Ensure dedication to make sure the company maintains a repute for high standards of business conduct.
  • Keep in mind the obligation to act fairly and justifiably between company members/shareholders.

Decision Making:

The Company director is responsible to make objective decisions bearing the responsibility and accountability of those decisions. The decisions should be made in line with the company constitution /agreement.

Avoiding Conflict:

It is company’s Director responsibility to watch out for any conflict of interest in the organization to ensure personal objectives don’t override company’s welfare and business objectives. It is company’s director responsibility to stay vigilant to avoid any Conflict of interest. A conflict of interest can also arise if for example contracts are being awarded to a person who is closely connected with the company director, e.g., spouse, partner, parent, child or other close family member. Company directors who think they may be involved in a conflict of interest should take note of the following three remedies:
  • Seek the board’s approval: If the board is unable to resolve the conflicts and cannot approve the situation then shareholder may be approached via board resolution.
  • Check the articles of association: In order to resolve the conflicts, the articles of association can be used as guidance.
  • Self-Action Protocol: The Director should follow the company constitutions.

Third Parties:

The company director should not accept the third-party benefits. As this can cause conflict.

Declaration of Interest (In proposed / existing Transaction/ Arrangements):

The Company director must declare any interest, transaction, arrangement with the company directly or indirectly. All the Transaction must be analyzed to determine the smooth process to avoid the conflict. Which should be acknowledged to the rest of directors.

Eligibility for the Company Director:

For a company one individual director is mandatory. They must be a physical person. Apart from above a second company director can be:
  • A Corporate body
  • A Partnership / Group
  • Another Limited Company
  • Business/charity or an organization.
  • *One individual director must be appointed at the time of company registration, but there is no limit to total number of directors.

Non-Eligibility of company directors:

A company director cannot be any of the following:
  • Company auditor
  • An un-discharged insolvent
  • A Person under the age of 16
  • A banned company director

Difference between Secretary and Company Director:

A Company secretary is appointed by the company director, who maintains company’s statutory books and records and assists with ensuring filing of company documents to the Companies House and other government offices, ensures board and shareholders resolutions are formally approved, filed and actioned in a timely manner. A company Secretary is there to assist the Directors, however ultimate responsibility of compliance with the Companies Act and any other relevant legislation falls upon company’s Directors

What Is a Corporate Director?

A corporate director is a term used to represent a company or any other form of corporate body appointed as the director of another company.

Director’s details on the Public Records:

The director’s details are available for public records at Companies House.
  • Title
  • Full Name
  • Nationality
  • Office address (Home address or other)
  • Date of Birth
  • Appointment date of Directorship
  • Profession
  • Registration Place of Corporate Director
  • Principal address of corporate director
Premier UK offers one hour free consultation to explain clients their duties and responsibilities as Company Directors and help ensure that you can meet your obligations in a proactive manner.