Directors Duties: What Do They Do in a Company

In a company, there are leaders and higher ranking people and officials responsible for making sure that the establishment runs smoothly. These are the people who have the authority to set rules, make decisions (complicated ones at most times) and even give out instructions which can make the company either fail or succeed.

The reality is, successful businesses are lead by great owners and leaders – and those that fail may have leaders, owners or even directors that lack judgment, control or even knowledge in the field. Aside from the marketing manager, the business owner, and the CEO of the company, there is one person who holds the most complicated tasks – and this is the director. The directors duties seem like easy tasks for the majority of people, but in fact, a director has a lot of responsibilities and functions. The success of the company, as well as how good the management is mostly depends on how the director handles the problems, the decision making as well as the fact that they have to set the rules that everyone has to follow.

The Companies Act No. 71 of 2008 (“Act“) discusses the directors duties – regardless of how small or big the company is. Some of the general duties may include but not limited to:

Decision Making – The CEO and CEO of the company do not make the decisions for the company. It is the director who does the decision making process. While the director thinks that one particular decision can affect the entire business, he or she will then endorse this to the higher positions and even set a meeting to make a sound decision at the end of the day.

Making your decision in behalf of the entire company is a tough job – one single mistake can result to company’s failures. On the other hand, if the director knows how to make the right decisions, the ladder of success continuously goes up, which benefits not just the owner of the company, but even the employees, staff and other workers associated with it.

Prevents Conflicts – Directors duties also include avoiding conflicts that may arise while on the decision making process. One way or another, there will be different advisers, managers, supervisors, board members who have different suggestions and proposals – which will later on cause conflicts and some sort of problem within the company. If you are a good director, you can immediately stop these conflicts and prevent the problem to cause further damage.

It is also the directors duties not to abuse the power. A director stands as the company’s voice – everything that the company does and does not do all comes from the director. He or she is the one responsible for all the changes and everything that goes around within the company.

This means that the director is one of the most powerful people within an establishment, and it is mentioned in the Act that they should not abuse the power and authority provided, but use it for the company’s good instead.

There are many other directors duties – but one thing is for sure – a good director can definitely make the company grow and succeed for long.


14 June 2012