14
Jul
11

Director’s Guide

“A leader is not an administrator who loves to run others, but someone who carries water for his people so that they can get on with their jobs” – Robert Townsend

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An appointed or elected member of the board of directors of a company who, with other directors, has the responsibility for determining and implementing the company’s policy.

A company director does not have to be a stockholder (shareholder) or an employee of the firm, and may only hold the office of director.

Directors act on the basis of resolutions made at directors’ meetings, and derive their powers from the corporate legislation and from the company’s articles of association.

As the company’s agents, they can bind the company with valid contracts entered into with third-parties such as buyers, lenders, and suppliers. Directors are the trustees for the firm and not for individual stockholders, but they may be sued by the stockholders as personally liable for the consequences of the acts that are fraudulent or beyond their vested powers. Also, whether appointed validly or not, they are individually and collectively liable for the acts and/or negligence of the firm.

Unlike stockholders, directors cannot vote by proxy and, unlike employees, cannot absolve themselves of their responsibility for the delegated duties.

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-Dee-

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Note:
1. Capacity, knowledge, or skill that matches or suits an occasion, or makes someone eligible for a duty, office, position, privilege, or status. Qualification denotes fitness for purpose through fulfillment of necessary conditions such as attainment of a certain age, taking of an oath, completion of required schooling or training, or acquisition of a degree or diploma. Qualification does not necessarily imply competence.
2. Precise limitation (from general to particular) of language, scope, or terms that would otherwise be interpreted broadly or differently.

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