Role of Directors

Shareholders, Directors, and Company Structure

Shareholders usually grant broad management authority to the board of directors, typically reserving only major decisions for shareholder approval. This delegation enables directors to manage day-to-day affairs, although shareholders hold ultimate control and can remove directors if necessary. While directors manage the company, shareholders’ powers are generally limited to major decisions, without directly interfering in management.

Board of Directors

The board is responsible for strategic oversight, comprising executive and/or non-executive directors. Executive directors actively manage operations, while non-executive directors supervise. Boards may delegate powers to managing directors or chief executives, allowing professional executives to operate the business. The board must include at least one company secretary, but a sole director cannot act as secretary.

Director Responsibilities and Appointments

Directors owe fiduciary duties to the company, not individual shareholders. In cases of insolvency, directors may face personal liability for wrongful trading. Directors, shadow directors, and de facto directors (who act without formal appointment) are subject to these statutory duties and may be restricted from future roles if they breach obligations.

Special Roles and Restrictions

Shadow directors influence decisions without formal titles, and de facto directors operate in director roles unofficially. Both assume the same responsibilities and liabilities as registered directors. Directors are appointed through general meetings or specified procedures, with the company required to notify the Companies Registration Office (CRO) of new appointments or terminations.