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Different types of company director

Knowing about the different types of company directors makes sure everyone is clear about their legal roles and responsibilities.
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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' (often simply known as ‘the Board’) or 'has been appointed to the Board' just means they are a statutory director.

De jure directors are statutory directors who have formally been appointed in law to act as directors or in accordance with the Articles of Association. A statutory director is, therefore, a de jure director.

Executive directors are employees as well as being statutory directors. They have day-to-day responsibility for running the business and are usually in charge of one area, like finance. Executive directors report to the Board and are often involved with strategic planning and implementing the Board’s decisions. 

Non-executive directors do not run the business day-to-day and normally only work part-time. They generally attend board meetings and provide independent oversight of the company’s strategy, ethics and integrity. Non-executive directors’ duties generally include acting in the interest of company stakeholders and monitoring the executive directors. 

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 their behalf if they are temporarily absent. An alternate director can only be appointed if this is allowed by the company’s rules (ie the Articles of Association).

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.

De facto directors are directors who haven’t been properly or legally appointed as a director but do, in fact, do things that directors normally are allowed to do (eg taking decisions and signing contracts on behalf of the company). Whether someone is a de facto director depends on what they do and how. However, they generally need to be seen to be acting in a senior, decision-making role rather than just being a member of the management team. During their time as de facto directors, they will owe the company the same general duties as a statutory director. Someone who is a de facto director may also be a shadow director and vice versa.

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.

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

However, the Companies 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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