WHO IS A DIRECTOR?
Directors are persons duly appointed by the company to direct and manage the business of the company.
Directors can be either executive or non-executive.
Executive directors – are employed by shareholders and are usually officers or employee in the company. Executive directors do not earn remuneration for their position on the board of directors, as they are in the company’s salaried employment.
Non-executive directors – are employed for their personal qualities, experience and specialist knowledge.
Primarily, they provide objective criticism on board matters, constructively challenge and facilitate strategic decisions by the executive directors.
Since they monitor the executive management, it is vital they are impartial and not influenced by other associations, shareholdings or directorships. Therefore, they must be Independent of other stakeholders or interested parties. However, in all activities, they must act in the interests of those who have an interest in the company, such as employees, clients, shareholders and society in general.
Non-executive directors also have a mentoring role to advise and guide Chairmen and Chief Executives where issues arise, or prior to them being brought up in board meetings. They criticize, as well as support the CEO and the executive team in decision making. They can also sit on sub committees to ensure the company benefits most from their skill sets. Non-executive directors are entitled to sitting allowances for every meeting of the company that they attend.
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