Different types of company director

Knowing about the different types of company director makes sure everyone is clear about legal roles and responsibilities.

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What is a 'statutory director'?

Statutory directors have legal rights and duties. They collectively act and make decisions on behalf of the company. Saying someone 'sits on the Board of Directors' (the Board) or 'has been appointed to the Board' just means they are a statutory director.

Different types of statutory director

Executive directors are employees as well as being statutory directors.  They have day-to-day responsibility for running the business and often are in charge of one area, like finance. Non-executive directors attend board meetings and provide independent oversight of the company’s strategy, ethics and integrity. They do not run the business day-to-day and normally work only part time. A managing director is sometimes appointed to lead implementation of the Board’s strategy. Their legal rights and duties are the same as other directors. A person appointed to the Board to represent a particular party (eg an investor) is sometimes called a nominee director. However, their legal rights and duties are the same as other directors. A director may appoint an alternate director who can act on his behalf if he is temporarily absent, if the company’s rules (ie the articles of association) allow this. A person who is not appointed to the Board, but whose directions are customarily followed by the Board, might be a shadow director and have some of the same duties as other directors.

'Directors' who are not statutory directors

Sometimes, departmental heads are called directors (eg Director of Communications) even though they are not statutory directors. Confusingly, if such individuals have not been appointed to the Board they do not have the legal rights and duties of a statutory director. The company and the individual should be careful to ensure that other parties are not misled about the status of the person with the title.

How do you know whether someone is a statutory director?

Normally, statutory directors have been appointed by a legal process and will be listed as directors on the UK Companies Register.

However, the Company’s Register is evidential, not conclusive. A person not listed can be a director and vice versa. Alternate and shadow directors will not be listed at the Companies Register and may not have been appointed by a formal process. You have to look at the circumstances to see who these are.

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