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Board of Directors: roles and responsibilities
Board of Directors: roles and responsibilities
Updated over a week ago

Companies are usually managed by a board of directors.

Executive Directors Executive Directors are appointed by the shareholders to manage a company’s day-to-day affairs. They influence the strategy and take decisions relating to the business. Founders are often directors. Key investors may be able to appoint a director to the board, if this is agreed by the company as a condition of their investment. and have the power to.

Non Executive Directors (NEDs) If there are any NEDs, they are generally expected to perform a supervisory role. They are impartial and have no interest or involvement in the company. This means that they cannot be also be founders, investors or employees in the company. NEDs are usually experienced professionals who have experience in the relevant industry.

Chairman The Chairman's primary role is to ensure that the board is effective in its task of implementing the company's direction and strategy.

Generally, directors are given wide powers under the Articles of Association to manage the company and to delegate powers to others.

Decisions of the board are taken by all directors (both executive directors and NEDs) acting together. This means that decisions must be approved by the board as a whole, and not by a sole director.

Directors can act individually, if the board has delegated specific powers and responsibilities to them. For example, one director can act as CEO of the company, or the board can specify which directors can sign documents on behalf of the company.

Directors owe certain duties to the company when performing their role. Often, the law will require them to act independently, in the best interests of the company and in accordance with the rules set out in the law and the company’s Articles of Association. If directors breach their duties to the company, they may be personally liable to compensate the company for any losses it suffers.

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