Roles of Director

A director of a company is a person who is responsible for managing the company’s business activities. It can also be defined as the head of an organization, either elected or appointed, who generally has certain powers and duties relating to management or administration of a company or organization. Directors are members of the governing board of a corporation or association elected or re-elected at annual meetings of the shareholders or members. As a group the directors are responsible for the policy making, but not day-to-day operation, which is handled by officers and other managers. In some cases, a director may also be an officer, but need not be a shareholder. Most states require a minimum of three directors on corporate boards. All companies are required to have at least one director (a public company must have at least two). Larger companies may have many directors who collectively manage the business of the company and they are often referred to as a board of directors. This is because companies, as artificial legal entities, cannot act themselves – they need to act through other persons. A company’s directors are the persons to whom the law looks to manage the affairs of a company on behalf of its owners. This is so even in the case of small private companies which may have only one or two shareholders: such a company must still have at least one director even where the director and the shareholder are one and the same person. In such a situation the law will still see a technical distinction between the interests of the shareholder as owner of the company and the responsibilities of the director as the person who makes decisions on its behalf.

A company director plays different responsibilities. The board of directors of a company is primarily responsible for determining the company’s strategic objectives and policies, monitoring progress towards achieving the objectives and policies, appointing senior management and accounting for the company’s...