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.
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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