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Questions and Answers
What is the primary responsibility of the board of directors in a company?
What is the primary responsibility of the board of directors in a company?
What is an ex officio director?
What is an ex officio director?
What percentage of directors in a profit company must be elected by shareholders?
What percentage of directors in a profit company must be elected by shareholders?
What is a temporary director?
What is a temporary director?
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What is the recommended composition of a company's board of directors?
What is the recommended composition of a company's board of directors?
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What is the primary difference between a manager and a director?
What is the primary difference between a manager and a director?
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What is one of the key functions of the board of directors?
What is one of the key functions of the board of directors?
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What is a director who is also an employee of the company referred to as?
What is a director who is also an employee of the company referred to as?
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What is a key aspect of a director's role in relation to the company's performance?
What is a key aspect of a director's role in relation to the company's performance?
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What are some of the main differences between directors and managers?
What are some of the main differences between directors and managers?
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Study Notes
Meaning of Director
• A director is a member of the board of a company, including alternate directors, as contemplated in s 66. • The board of directors has the authority to exercise all powers and perform functions of the company, except as otherwise provided in the Act or Memorandum of Incorporation. • A director includes any person occupying the position of director or alternate director, by whatever name designated.
Types of Directors
• An ex officio director holds the position solely as a result of holding another office or title or status. • An MOI-appointed director does not have to be appointed by shareholders. • An alternate director is elected or appointed to serve in substitution for a particular elected or appointed director. • An elected director is elected by shareholders, with at least 50% of directors in a profit company being elected by shareholders. • A temporary director can be appointed by directors, unless the MOI provides otherwise.
Board Composition
• The board should consist of both executive and non-executive directors, with non-executive directors being the majority. • Executive directors are employees of the company, whereas a director does not have to be.
Directors and Managers
• A manager is not necessarily an employee of a company, whereas a director does not have to be. • The main differences between directors and managers relate to leadership, decision-making, duties and responsibilities, and relationship with shareholders.
Functions of the Board of Directors
• To give strategic direction to the company. • To approve policy and planning that gives effect to the direction provided. • To oversee and monitor the implementation and execution by management. • To ensure accountability for organisational performance through reporting and other mechanisms.
Executive and Non-Executive Directors
• A director who is also an employee is referred to as an executive director. • Non-executive directors are not employees of the company. • Differences between executive and non-executive directors include leadership, decision-making, duties and responsibilities, and relationship with shareholders.
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Description
This quiz covers the role and responsibilities of a director in a company, including their authority and functions as part of the board of directors.
