Youtube Video link -
https://youtu.be/QxQYccE9PL0
DIRECTOR – According to Companies Act, A director may be defined as a person having control over the direction, conduct, management or superintendence of the affairs of a company. Anyone one who is in the power to perform the duties and responsibilities of a director will be called as director by virtue of his function irrespective of, by what name he is called.
BOARD OF DIRECTORS - A board of directors include all directors elected by a corporation's shareholders to represent their interests and ensure that the company's management acts on their behalf. The Board has extensive power to manage a company, delegate decision making power to executives and ensure that company’s objectives are achieved in compliance with the provisions of the Articles of Association. The board shall exercise its power subject to provisions contained in Articles, Memorandum, Central Govt. and Company law board.
EXECUTIVE DIRECTOR – The full time working director of the company responsible towards shareholder’s interest and company’s profitability.
NON-EXECUTIVE DIRECTOR – They are not involved in everyday working of the company. They take part in planning, policy-making and attends board meeting of the company.
INDEPENDENT DIRECTOR – They are the directors who do not have any relationship with the company which might influence their decisions or judgments. They are the person with integrity, experience and expertise.
NOMINEE DIRECTOR – They are appointed in a company to ensure that the affairs of the company are conducted in a manner dictated by the laws governing companies and there is no oppression or mismanagement.
ALTERNATE DIRECTOR – Appointed to attend, speak and vote in a board meeting on behalf of the director of a company who would be unable to attend.
Thank You For Watching
Subscribe To DevTech Finance
1. DEVTECH FINANCE
BUSINESS ETHICS & CORPORATE GOVERNANCE
BOARD OF
DIRECTORS
WHO IS A DIRECTOR
& TYPES OF
DIRECTORS
ELIGIBILITY TO BE
APPOINTED AS
BODs
RESPONSIBILITIES,
DUTIES AND
LIABILITIES OF BODs
3. DIRECTOR & BOARD OF DIRECTORS
• DIRECTOR – According to Companies Act, A director may be defined as a
person having control over the direction, conduct, management or
superintendence of the affairs of a company. Anyone one who is in the power to
perform the duties and responsibilities of a director will be called as director by
virtue of his function irrespective of, by what name he is called.
• BOARD OF DIRECTORS - A board of directors include all directors elected by
a corporation's shareholders to represent their interests and ensure that the
company's management acts on their behalf. The Board has extensive power to
manage a company, delegate decision making power to executives and ensure
that company’s objectives are achieved in compliance with the provisions of the
Articles of Association. The board shall exercise its power subject to provisions
contained in Articles, Memorandum, Central Govt. and Company law board.
4. TYPES OF DIRECTORS
• EXECUTIVE DIRECTOR – The full time working director of the company
responsible towards shareholder’s interest and company’s profitability.
• NON-EXECUTIVE DIRECTOR – They are not involved in everyday working of
the company. They take part in planning, policy-making and attends board
meeting of the company.
• INDEPENDENT DIRECTOR – They are the directors who do not have any
relationship with the company which might influence their decisions or
judgments. They are the person with integrity, experience and expertise.
• NOMINEE DIRECTOR – They are appointed in a company to ensure that the
affairs of the company are conducted in a manner dictated by the laws
governing companies and there is no oppression or mismanagement.
• ALTERNATE DIRECTOR – Appointed to attend, speak and vote in a board
meeting on behalf of the director of a company who would be unable to attend.
5. ELIGIBILITY TO BE APPOINTED AS BOARD OF
DIRECTORS
• TO BE ELIGIBLE AS A DIRECTOR, THE INDIVIDUAL :-
a. must have capability to perform legal actions i.e. of sound mind and
competent age
b. within a period of 5 years prior to his/her appointment, he/she must
have never been declared bankrupt
c. he/she must have never been sentenced for committing a crime or is
convicted by court for any offence with petition pending
d. he/she must not have been disqualified for appointment as director by
the order of court on grounds of fraud to the company
e. directors can be removed from office even after appointment by the
shareholders, central govt. and company law board on any act of
violation
6. RESPONSIBILITIES & DUTIES OF BOARD OF
DIRECTORS
• Select and elect CEO and delegate to him all the duties to manage the
company not the one reserved to the board, evaluate the performance of
the CEOs and decide compensation
• Review and approve major corporate objectives, policies, budgets and
strategies as initiated by the CEO
• To ensure compliance with all laws affecting the business
• To deliver an annual report that includes the financial statement of the
Company
• To prepare and submit a business plan (that includes an annual budget
plan) for the next financial year prior to the commencement of the next
financial year
• To prepare and maintain a register of shareholders of the company
containing information on the share ownership in the company
7. RESPONSIBILITIES & DUTIES OF BOARD OF
DIRECTORS
• To hold a General Meeting of Shareholders (including to send invitations) to the
shareholders either annually or extraordinary as necessary or requested by
certain Shareholders, Commissioners or Directors of the Company
• To delegate power and issue instructions to subordinates for the implementation
of policy in accordance with the Articles of the company and other governing
laws
• To perform duties with due diligence and do not attempt to achieve any undue
gain or advantage either to himself or family
• Must disclose his shareholding in a company, interest contract of the company,
name , address and occupation
• Decide the minimum subscription, issue prospectus with proper disclosures,
sign & deliver the prospectus to registrar before issue to the public
• To call statutory and annual general meeting of the company as and when
required to be held
8. LIABILITIES OF BOARD OF DIRECTORS
LIABILITY AGAINST COMPANY
• An ultravires act where the directors have entered into a contract beyond their
powers.
• Breach of trust where the directors make a secret profit out of the business
• For negligence or for not performing his duties with integrity
• Liability for bankruptcy losses
LIABILITY TOWARDS THIRD PARTIES
• For any mis-statement in the prospectus issued to public
• For the failure to repay application money on non-receipt of minimum
subscription or on refusal to list shares by the stock exchange
• For acting in their own name without mentioning the name of the company
• For acting beyond the powers of the company and liability during winding up
9. LIABILITIES OF BOARD OF DIRECTORS
LIABILITY TOWARDS SHAREHOLDERS
• For mis-statement in prospectus
• Failure to give the notice to the registrar for conversion of share
• Failure to issue share certificate and debenture certificate
• Failure to maintain register of the shareholders and debenture holders
• Default in holding annual general meeting
• Failure to provide annual report containing financial statements,
auditor’s report, management discussion, plans and estimated budget