F4​​-​​Management,​​

Regulation​​
and
Administration​​
of​​
Companies
Company​​
Directors

ROLE​​
OF​​
DIRECTORS:

Board of directors - executive committee which comprises of directors and chairman and runs a company
through regular meetings, policy making and strategy settings. Directors have the power to decide on a
particular​​decision​​and​​
see​​it​​
being​​carried​​
out​​
in​​the​​method​​they​​propose.

Key​​functions​​
of​​
directors: Other​​tasks:
1) Defining​​the​​purpose​​ of​​the​​company; 1) Overseeing​​strategy;
2) Setting​​company’s​​values​​ and​​standards; 2) Monitoring​​risks,​​control​​systems,​​governance;
3) Identifying of the stakeholders relevant to the 3) Monitoring​​human​​capital​​aspects​​of​​company;
business​​of​​the​​company; 4) Managing​​potential​​conflicts​​of​​interest;
4) Ensuring that company’s obligations to its 5) Effective​​communication​​of​​plans;
stakeholders​​are​​ understood​​and​​met; 6) Increasing​​reputation.
5) Developing​​of​​a​​ strategy​​combining​​all​​factors;
6) Ensuring that management implements the
strategy;
7) Providing entrepreneurial leadership of the
company within a framework of prudent and
effective controls which enable risk to be
assessed​​and​​managed;
8) Ensuring that the necessary financial and
human resources are in place for the company
to​​meet​​its​​objectives;
9) Review​​of​​management​​performance.
MANAGING​​
DIRECTOR/CHAIRMAN​​
RESPONSIBILITIES:

1) Leads​​the​​board;
2) Running​​the​​board​​and​​setting​​its​​
agenda;
3) Ensuring​​the​​board​​receives​​accurate​​&​​timely​​information;
4) Ensuring​​in​​effective​​
communication​​with​​shareholders;
5) Ensuring​​sufficient​​
time​​allowed​​
for​​discussion​​of​​controversial​​issues;
6) Taking​​the​​lead​​
in​​board​​development;
7) Facilitating​​board​​
appraisal;
8) Encouraging​​active​​
engagement​​
by​​all​​members​​of​​the​​board;
9) Reporting​​in​​(chairman’s​​
statement)​​
and​​
signing​​off​​accounts.

CHIEF​​
EXECUTIVE​​
OFFICER:

Chief executive officer (CEO) - senior executive in charge for management team who is responsible for leading
management​​team​​at​​
and​​below​​board​​level​​
and​​reportable​​to​​the​​board.

Comparison​​between​​the​​
chairman​​and​​
CEO:

Chairman CEO

- Often​​appointed; - Elected​​among​​directors;
- Non-executive​​officer; - Executive​​director.
Reasons​​for​​separation​​of​​
roles​​of​​chairman​​and​​CEO:

a) Reduces​​the​​concentration​​
of​​
power​​;
b) Prevents​​the​​reduction​​of​​
efficiency​​
of​​other​​directors;
c) Reduces​​the​​risk​​of​​
conflict​​
of​​interest;
d) Reassures​​shareholders.

OTHER​​
DIRECTORS:

EXECUTIVE​​
VS​​
NON-EXECUTIVE​​
DIRECTORS:

Company practice is to distinguish directors into executive and non-executive directors. These are corporate
governance​​best​​practice​​
and​​​not​​
legal​​classification​.​​Both​​types​​of​​directors​​have​​the​​same​​responsibilities​
.
DIRECTORS​​
AND​​
THEIR​​
OFFICE:

First directors are appointed by the subscribers to the memorandum of association and are named on the
registration form. The directors automatically take office on the date of incorporation per Companies Act 2006
s.16(6).

Names and other details of the directors should be entered in the register of directors per Companies Act 2006
s.162.​​Subsequent​​directors​​are​​appointed​​
in​​
accordance​​with​​the​​company’s​​articles.

Model Articles states that: “Any person willing to be appointed by a director, and permitted by law to do so can
be​​appointed​​by​​ordinary​​resolution​​of​​
a​​general​​meeting​​or​​by​​resolution​​of​​the​​directors.”

When a director resigns the board of directors must be called in order to examine the resignation and either
accept​​or​​reject​​the​​
resignation.