Company Directors’ duties and responsibilities can be far reaching, and may have influence over many aspects of the day to day running of a business as well as looking at the future growth and success of the enterprise.
Depending on the size of a company, you could have just one director, or you could have several. In most cases within an established company there will be a board of directors who are primarily responsible for:
– Setting up company policy, outlining goals and objectives, and then monitoring progress towards meeting these goals
– Appointing senior staff, line management and project managers
– Being accountable to company shareholders
– The managing director (MD) or chief executive officer (CEO) is the person responsible for the overall performance of the company. They report directly to the chair or the board of directors.
When you officially register your company, the first company directors are appointed at the same time. The person or persons you nominate as directors are named in form IN01 and will then be deemed to have been appointed as your company’s first directors. For example, when your register your company with Your Company Formations and name your company director or directors, each new director will be asked to provide their full name, address, date of birth, nationality, country of residence, former names and business occupation. This is standard information to be included in the relevant form which the director will be required to sign to signify consent to act as a director.
You can make subsequent appointments through submission of form AP01, and new directors coming onboard will be governed by the company’s articles of association. Normally the company’s articles will outline the board of directors responsibilities to hire staff or to appoint additional directors up to the maximum number specified by the articles. A director can file a service address with Companies House as well as his or her home address. It will be the service address that appears on the public record, and personal addresses will be kept private. A company director must also give general notice of any interests in any contracts held that involve the company. Directors of quoted PLCs are required to state any declaration of interest in the company’s shares under the Disclosure and Transparency Rules.
As a rule, new directors are given a copy of the company’s memorandum and articles of association, and details of the business and affairs of the company, including board meeting minutes, and statutory report and accounts covering the past two years.
What powers do company directors have?
Generally speaking, directors responsibilities cover the management of your company, and are able to exercise all the powers within the company. Their authority may be limited by the constraints of the Companies Act 2006, and also by the articles of association. As an example, a director may not be able to authorise any borrowing or finance on behalf of the company without the agreed consent of the other board members. Rule such as these are usually written into articles of association.
Company directors normally act as a collective with other board members to discuss and agree issues and concerns. This does not mean that a single company director is completely powerless without the rest of the team. The articles of association may allow the board of directors to delegate powers to individual company directors where appropriate or necessary, for example sending just one board member to represent the company at regular meeting to deliver decisions, or to negotiate deals.