Definition of a Director: A Guide to Company Directors

What is a director?

A director is someone who oversees a company. They are normally appointed by the shareholders or ownership of the company. The directors are responsible for making sure the company runs smoothly. Usually, directors are seen as the face of the company. This is because they are the ones who make decisions about the future direction of the company.

Directors of a company have certain duties and responsibilities.

Directors are responsible for setting the company’s goals and implementing corporate policy. They should adopt bylaws and monitor executives. If necessary, they should fire them. They should pay dividends and establish executive compensation.

Different types of directors

A director reports to a vice-president or CEO.

Directors oversee specific areas within organisations.

There are many different kinds of directorships available.

For example, you could become a board member, trustee, or volunteer director.

You might even be appointed as a corporate governor or council member.

Inside director

An inside director is an employee who reports to the CEO or Board or Directors. They are usually hired after a company has been founded and is responsible for making sure the business runs smoothly. They work closely with other departmental heads within the organization to ensure all aspects of the business operate well.

Outside director

The term “outside director” refers to someone who works outside of the company he advises. This person might be hired by a company to give advice about how to run it better. He might also be brought in to advise the board of directors on what to do during a difficult period.

These people are called “outside directors.” Companies sometimes use an outside director because they want to hear different perspectives. Or they think having an outsider on the team will make them look smarter.

How are new directors appointed?

Directors are normally appointed by shareholders during annual general meetings. However, there are exceptions. For example, if a shareholder dies, the board of directors must call an extraordinary general meeting within 30 days. If no one steps forward to take over the position, the board of directors appoints a temporary replacement. This person serves until an election is held.

How can directors be removed?

Directors can be removed if the Company’s Articles of Association state that directors can be replaced. This happens when the Board decides to replace one or more directors. In case there is no provision in the Articles, the directors cannot be removed without approval of shareholders. However, it is possible to remove directors even without shareholder approval. If a director does not attend board meeting for a continuous period of six months, his/her removal becomes automatic.

Bankruptcy is the main cause of removal of directors. Removal of directors due to bankruptcy is usually done during the course of winding up proceedings.

Removal by ordinary resolution

Shareholders are able to vote to remove directors at general meetings held every three years. If there are no special resolutions passed beforehand, the board must resign within 30 days of being voted out. This is called removal by ordinary resolution.

A shareholder can call for a meeting where he/she proposes a resolution to remove one or more directors. In practice, this happens rarely because it requires the approval of a majority of shareholders.

The shareholders are entitled to propose a resolution to remove a director even if they do not hold over 50% of shares. However, such a proposal does not require the approval of a majority.

If a shareholder holds less than 50% of shares, he/she cannot call for a meeting under this rule.

Retirement by rotation

The Dutch government has abolished the practice of retirement by rotation. This means that directors who resign or retire will no longer automatically become eligible for another term. Instead, the board must vote on whether to allow them to remain in office. If it does, they will continue receiving their salary until the next annual general meetings.

Nonexecutive directors are now allowed to step down without having to go through a process of “retirement.” They can do so either voluntarily or because of ill health. However, nonexecutive directors cannot force themselves out of office.

Directors who resign or retire will also still receive their salaries until such time as the board decides to pay them off. In addition, directors who choose to step down will still be able to attend board meetings and cast votes.

Disqualification by the Court

The Companies Act 2006 provides for the removal of directors from office if they commit an offence under the Act. This includes offences relating to fraud, dishonesty, breach of trust, corruption or misfeasance. If a director commits such an offence, the court will make a declaration that the director is unfit to serve as a director. The court will also declare that the company must be wound up unless the company elects to continue trading while the matter is being determined.

Frequently Asked Questions

What Is a Non-Executive Director?

A non-executive director is someone who sits on a board of directors without being an officer, managing director or CEO. They’re typically appointed by shareholders to represent their interests. These individuals aren’t employees of the company, and therefore don’t engage in the daily operations of the firm. Instead, they tend to focus on long-term strategy and policymaking. Most often, they serve as an advisor to executives, helping them make decisions about how best to run the company.

What Is the Difference Between a Shareholder and a Company Director?

A shareholder owns part, or ALL, of a company. Directors are chosen by shareholders to oversee every operational and financial aspect of the company.

Shareholders usually buy shares in companies because they believe in the future success of the company. They want to see the company grow and prosper.

By buying shares, shareholders become owners of the company. This gives them certain rights such as voting rights.

The board of directors oversees the day-to-day operations of the company. They make sure that everything runs smoothly, and that the company follows its legal obligations.

They ensure that shareholders’ interests are protected, and that the company is doing well financially.

What Details of a Company Director Can Be Found on the Public Record?

Companies House publishes information about directors on its site. This includes the following details:

Natural director

Title, full first name( s ) and surname, plus any previous names


Office address ( residential or other )

Date of birth




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