Board Structure and Composition

Question 1

How many directors must a company have?

Answer 1

Private companies must have one and public companies must have two (s154).

Question 2

Features of directors

Answer 2

• Manage the company on a day to day basis
• Certain actions can only be taken by directors if the shareholders have given authority
• Owe duties to the company

Question 3

Features of shareholders

Answer 3

• Own the company
• Are able to control key decisions through shareholder resolutions eg shareholders need to vote to give directors authority to change the articles, or name of the company, to vary class rights etc

Question 4

Relationship between directors and shareholders

Answer 4

Directors have day to day control of the company (MA 3)

Shareholders are the owners of the company.

Question 5

How can shareholders be protected from the rogue actions of a director?

Answer 5

One protection- MA4- shareholder’s reserve power which allows shareholders to direct the directors to take/refrain from taking specified action.