What does a company director do?

Every company director shares core oversight responsibilities. Some might have different skillsets, experience and independence from others, but collectively, they are in their roles to steward the company to success.

The company director:

• Oversees the company’s strategic direction. Working with senior management, they define short and long-term goals, adapting over time where necessary.
• Always asks constructive questions of strategic elements, using their experience to query decisions or practices that need more explanation.
• Works with other board members to hire/fire a company’s CEO and other C-suite leaders.
• Monitors performance in all areas, including finance, risk and newer topics like sustainability and AI governance.
• Attends regular meetings to vote on key decisions.
• Sets remuneration for the CEO and other C-suite leaders.
• Manages policies around dividends and stock options.
• Oversees and approves mergers.
• Takes a leading role when the company lands in a crisis.

Directors collectively exercise their rights and responsibilities during board meetings. This is the primary channel for leadership when it comes to directors, and it should always be respected. Indeed, board-level decisions made outside of board meetings (even those which are still given the “official” seal of approval in the meeting, with most of the discussions remaining outside) are a giant red flag. It indicates that the essential governance structures are not functioning properly.

Board meetings generally operate with set structures. They often begin with the approval of a meeting agenda, followed by reports from the C-suite and various board committees. After that, any proposals will be discussed, and this is where directors exercise their scrutiny, questioning and refining ideas through collaboration with each other. Following that, a vote on the proposal will usually ensue, enabling directors to use their other principal powers of decision-making.

Every single process mentioned above will be recorded in documents like the meeting minutes. This is a requirement, and minutes can often be essential records when examining past decisions.

Yes, with very few exceptions.

There are two parts to this question: whether you need register “internally” and whether you need to register “externally”.

Internal registers for directors belong to individual companies. No matter where you are in the world, every company must have such a register and, if you’re a director, you must be on it. Usually, these registers are not made public.

National registers – covering all companies and maintained by regulators – are widespread, but who needs to appear on them, and whether the information is public, varies much more.

In the UK, for example, all limited companies must disclose the full names, nationalities, birth years and occupations of their directors on a register run by Companies House. By contrast, the US doesn’t have a national, publicly available register; most of the responsibility for keeping records is left to the individual states. So, the rules differ not just by geography, but by company type (corporation vs limited liability).

Always check your local jurisdiction’s rules in this area and ensure you comply.

A core part of a director’s role is fiduciary duty. Every decision should be made with this principle in mind.

In governance, fiduciary duty is a concept whereby the director is legally bound to act in the best interests of the company’s shareholders. No matter the issue, big or small, the shareholders’ wishes should always come before the director’s.

In some governance structures (like on Continental Europe or in companies subscribing to modern stakeholder capitalism concepts), fiduciary duty extends beyond shareholders to also encompass groups like employees, consumers, communities etc, but in the legal fine print, most directors worldwide will still find that shareholders are the primary focus.

If you’re a director, further legal breakdowns of your fiduciary duties will be available in the relevant company legislation where you work. For example, in the UK, this is the Companies Act.

Based on the principles of fiduciary duty, a company director will inevitably have to be able to read financial reports and understand the state of the company. They should also understand the risks the company might be facing and ensure that legal requirements are met.

• A company director is someone who sits on the board of a company.
• As a director, they are legally responsible for the company’s business and can be held accountable for its actions.
• As a director, you need to be aware of your fiduciary duties and responsibilities. A director should act in the best interests of the company, and there are various legal obligations.
• The ultimate responsibility of the director is to manage the business on behalf of the shareholders.

To develop the practical knowledge, insight and global mindset to be a great company director and board member, you can take the Diploma in Corporate Governance. Download the course brochure here and below. 

• Corporate governance guidelines – Harvard University
• 5 core responsibilities of any great board of directors – Forbes
• A conversation about the responsibilities of a company director
• How to Find the Registrar of Companies List of Directors: A Guide for Future Board Members
• Search the register – Companies House
• Fiduciary duties
• What is stakeholder capitalism?