No matter the industry or size of the business, every organization has a person who is keeping an eye on the business affairs and is vested with the authority to determine and implement a company’s policy. That person is referred to as a director. For a company to run smoothly and efficiently, it is essential that a director understands its responsibilities and duties. Thus, Richard Lechartier, a Director at ILY FILMS Limited walks you through what it entails to be a director. Read on!
Director definition by Richard Lechartier
Simply put, a director is a person that gives direction. A person or a group of person who supervises a department or administrative unit. The directors are appointed by the shareholders of the company and they are required to manage the day to day activities of the organization.
Every organization has one or more directors. In large companies, there are more than one director who act as a board and oversees the affairs of the organization. This is done in accordance with the Memorandum of Association (MOA) and Articles of Association (AOA) of a company. In an organization, a director:
- Maintain optimum performance of the department and the overall organization
- Prepare, call and organize shareholders meetings
- Make strategic day to day plans and future plans
- Bind deals and contracts with suppliers, lenders, customers on behalf of the company
- Prepare and file statutory documents.
- Employ staff and appoint agents
Director of a company is a person elected by the shareholders for managing the affairs of the company as per As a director, you have legal obligations to the company and shareholders, and there are responsibilities that have to be carried out.
Directors occupy a position of trust and transparency and they oversee the affairs of an organization. Directors have some power to ensure successful operations of the business. It is in the director’s best interest to work for the organization’s success, if there is any breach in contact, a director is liable to face the penalties. Here are the responsibilities of a director:
Exercise powers for the company purpose
The director must act in accordance with the power granted by the constitution and it must be for the reasons in which they are given. A director can exercise independent judgment, be able to make decisions on their own, but still in accordance with the constitution. Moreover, a director must have a reasonable level of care and diligence.
Promote the success of the company
Directors cannot act in their own selfish interest but in the interest of the company. They must act in good faith, promoting the success of the company and in favor of the shareholders.
Ensures the company complies with the laws
Directors must ensure the company complies with the laws governing the operation of the company.
Avoid conflicts of interest
Directors must not have any conflict of interest with the organization regardless of whether the company can take advantage or not. This means that if there are any situations or events of a conflict of interest with the organization, the director must make the decision in favor of the organization.
These responsibilities explained by Richard Lechartier apply to most companies and it must be strictly adhered to by directors to avoid problems in the organization.