7a Directors Flashcards
What is a director?
Person who fulfils the role of a director.
What are the different types of director?
- De facto director
- De jure director
- Shadow director
- Alternate director
- Executive director
- Non-executive director
- Managing director
- Chairman
What is a De Jure director?
Director at law (followed correct legal procedure).
What is a De Facto director?
Director in fact (not legally appointed but fulfils the role)
What is a shadow director?
Type of De Facto director who the board of directors usually follow instructions from.
If someone is providing advice to directors, does this make them a shadow director?
No, not if they’re acting within their professional capacity.
What is an executive director?
Traditional type of director who is an employee of the company and has a specific role such as finance director.
What is a non executive director?
Directors involved on a part time basis who receive a nominal fee and role is to control the executive directors to protect the members interests.
What is a managing director?
They are an executive director who’s role is to run the company.
What is a chairman?
A non executive director who’s role is to run the board and ensure correct procedure is followed in directors meetings.
What is an alternate director?
A director who is appointed by the main director who’s role is to fill in for them when necessary.
What 2 ways can a director be appointed?
- By members (>50% vote)
- By existing directors (members will vote on this at the next AGM)
What 5 ways can a director be removed?
- Death
- Resignation
- Not standing for re-election
- Removal
- Disqualification
In what circumstances must a directors step down based on the model articles?
- Prohibited by law
- Bankruptcy - order made against them
- Composition with creditors re their debts
- Incapacity - doctor/court deems them physically or mental unable to act as a director.
- Notice of resignation
What is the procedure for a director to be removed?
Special notice must be given for a meeting, director can circulate representations to plead their case, director can attend the meeting, members must pass an ordinary resolution.
