What Is a Director?

Director / Directors

A director is an individual appointed or elected to handle a company’s corporate policy and strategy by collaborating with other directors. Collectively, they form the board of directors responsible for guiding the organisation. Many countries have a law that each registered company must have at least one director. 

Types of directors

Different types of directors include:

  • Managing director

A managing director is a high-ranking executive who supervises a company’s everyday operations and implements and amends policies.

  • Executive director

An executive director is a senior manager employed by the company who performs operational and strategic business functions. They often handle business assets, hire/fire staff and create business plans.

  • Non-executive director

A non-executive director does not have management duties within the company. They offer independent advice on business practices and monitor executive management.

  • De facto director

A de facto director in a company acts as a director and often makes important management decisions without being formally appointed.

  • Shadow director

Unlike a de facto director, shadow directors do not claim to be directors but do often influence strategic decisions..

Responsibilities of a director

A director’s responsibilities include:

  • Promoting the success of the company

A director is primarily responsible for acting in good faith to promote the company’s success and benefit all its members.

  • Providing strategic guidance

Directors must develop and review their organisation’s strategy. They should understand the risks and opportunities of the company’s business processes.

  • Exercising care and skill

They should exercise care and utilise their skills and experience to make informed decisions.

  • Ensuring compliance

They must ensure that the company’s operations comply with the prevailing laws and regulations.

  • Overseeing financial management

They have to oversee the company’s finances and ensure the integrity of its reporting system.

  • Evaluating the senior leadership

A director is responsible for regularly assessing the effectiveness of the senior leadership and performing succession planning.

Key attributes of a director

These are the key attributes that make a good director:

  • Strong management skills

A good director provides the company with the necessary guidance and encouragement needed to achieve its objectives. They should prioritise vital tasks to optimise business performance.

  • Visionary leadership

A visionary leader sets clear goals, creates strategic plans to achieve them and provides resources to bring positive results.

  • Strategic decision-making

Making informed decisions creates growth opportunities. Strategic decision-making requires a detailed analysis of company objectives and associated risks.

  • Critical and analytic thinking

Directors should have the ability to interpret and recognise relevant data and approach problems methodically to make impactful decisions.

  • Good communication

Strong board communication skills, written and oral, are critical for leading productive meetings and discussing strategies.

  • Adaptability

A director must be able to adjust quickly to workplace changes and run management strategies to maintain the company’s momentum towards its goals..

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