DIRECTORS AND THEIR

MEETINGS 1
Dr. Alexander Amankwaa
 Introduction
• The conduct of a company’s business is the responsibility of the Board
of Directors’(Hayfron Benjamin J in Okudjeto v Irani Brothers in
(1974) 1 GLR 74 )
• The purpose of the appointment of directors is for them to administer
the business of a company(section 170(1)
• They may not be called Directors. Examples other names in the
absence of calling them directors are Council Members, Senators,
Regents, Executive etc.
• Once they have been appointed to adminster the conduct of the
business they are directors of the company.
 Introduction

• A person or people may not have been appointed director(s) but may
be saddled with the responsibilities of directors if
• a.they represent (or hold themselves out) to be Directors,
• b.they knowingly allow themselves to be held out to be Directors; or
• c.they issue directions or instructions that the duly appointed
Directors,
• In fact one is said to hold himself as a director of a company when he
tells others that he is a director when in fact he is not a director.
 Introduction
• In Commodore v. Fruit Supply (Ghana) Ltd, a shareholder who had his
name on the company letterhead as director and was transacting
business on behalf of the company was deemed a Director.
• The Court of Appeal held that he was a Director and that his acts
were binding on the company.
• Unless the Constitution holds otherwise, a Director need not be a
Member or Shareholder of the company (section 174 (1)).
 Appointment of Directors
• For appointment of a person as Director, his or her consent is
required(sections 13(2(i) and 172 (2)(b) ).
• Seeking the consent of the person helps to ensure that no one is
named a director of a company without his knowledge and approval.
• The First Directors are to be named in the Application for
incorporation of a company(section 13 (2)(g),
• A company’s constitution may make provision for the appointment of
a Director by any class of shareholders, Debentureholders, creditors,
employers or any other person(section 172(4) ).
Appointment of Directors
• When a casual vacancy occurs in the Board of Directors it may be
filled by continuing Directors or Ordinary Resolution of a company
• A casual vacancy is said to occur when the director has not retired but
leaves office as a result of other reasons example resignation, death,
incompetence or removal from office.
• This means that where a person serves his term lets say three years
and he finishes the term, there is no casual vacancy.
 Types of Directors
• Act 992 identifies various types of directors.
• These are substitute director, Alternate director, Executive Director
and Managing Director.
• We shall begin to consider of the above listed types of directors.
Substitute Directors
• A substitute Director is appointed by the company unless the
constitution of the company says otherwise(s 180)
• The appointment is usually made by an organ of the company
normally but it could also be by the Board of Directors
• The constitution can on the other hand allow for the appointment in
a manner other than by an organ of the company.
• A substitute Director deputises for the main Director.
• A substitute Director can attend a meeting even if the Principal
Director is present except that he cannot vote.
Alternate Director
• The main Director appoints the Alternate unless the constitution
prohibits such appointment.
• The Appointing Director ie the one whose position needs to be filled
can appoint someone to act on his behalf as a result of his absence
from Ghana or his inability to act as Director.
• The appointment must be in writing. The appointing Director as well
as the one appointed must sign and lodge same with the company.
• An existing Director can be appointed an Alternate Director. When it
happens , the said Director will have an additional vote.
 Alternate Director
• An Alternate Director cannot appoint another person as Alternate
Director. Note ‘the expression delegatus non potest delegare’ which
means a delegate cannot sub-delegate.
• when the Appointer is present, an Alternate Director cannot attend or
vote at Directors meeting or committee meetings of Directors.
• The maximum period that an Alternative Director may act as Director
is six months.
• It must be noted that the Alternate Director appointed may be an
existing Director or any other person approved by resolution of the
Board of Directors as an Alternative Director-Okudjeto v Irani
Brothers.(1974) 1 GLR 374.
Executive Director
• A Director is said to be an Executive Director if he holds office or a
place of profit in the company other than the office of an Auditor(s
183).
• He or she can get salary, commission, share of profit or participate in
the company’s pension or retirement schemes.
• A director who also serves as Managing Director, Company Secretary,
Accountatnt or Production Manager is an Executrive Director.
• Where a person has designation Executive Director but he is not a
director it is wrong in law.
 Executive Director
• If the said Executive Director is a member of the Board then he
should be described depending upon his schedule in the company eg
Managing Director, Chief Marketing Officer, Executive Director-
Marketing , Executive Director-Legal.
• A bare decription of oneself as Executive Director is vague.
 Managing Director
• A person is described as a Managing Director when he is the director
to whom other directors have entrusted and confered on him powers
exercisable by directors with such terms and restrictions that the
Board of Directors deem appropriate(Section 184 (c) ) pursuant to
Section 383, the first schedule of the Companies Act defines
managing director as ‘’ a director to whom has been delegated the
powers of the board of directors to direct and administer the business
of the company’.’
• The Board of Directors have the right to revoke or vary all or any such
powers conferred on the Managing Director.
 Qualification and Disqualification
• Persons are qualified to unless disqualified
• A person aged eighteen or more is qualified to be a DIrector unless
disqualified(section 12, First Schedule).
• There are three regimes of those permanently disqualified, those
who are automatically disqualified for a period from being a Director
and those disqualified to be Director except with leave of court.
Permanent Disqualification
• The following are not qualified to be directors”
I. infants(section173(1) (a)-a person under the age of eighteen
II. persons adjudged to be of unsound mind(section 173 (1)(b).
III. Corporate Bodies(section 173(1) (c)
Automatic Disqualification
The persons who fall under this category of disqualification are
persons
• convicted within the last five years of an offence involving fraud or
dishonesty or relating to the promotion, formation or running of a
company (section 177 (2) (a) )
• Where a second conviction of the genre of offences is registered , the
five year disqualification extends to ten years(section 177 (2) (a) ).A
third conviction disqualifies a person for life(section 177 (2) (b) )
Automatic Disqualification
• Director or senior Executive of a company that has become insolvent
within the last five years on account of or partly as a result of the
culpable activitries of that Director(section 177 (2) (b) )
• Disqualified by court to act as Company Secretary, Receiver. Manager
or Liquidator of a company(Section 177(2) (b)