CORPORATE GOVERNANCE
Roles And
Responsibilities Of
Directors In Listed And
Non-Listed Companies
By Felix Owaga Okatch
I
n discussing roles and responsibilities
of directors, it is important abinitio
to define the word director. In the
same circumstance also go a step further
and explain its meaning in the realm of
corporate governance.
According to Oxford English dictionary,
a director (s) is a person who directs or
controls something. Is a member of
management board of a commercial
company. A person who directs a film etc.
strategic planning are put in place. This
is to ensure good implementation of set
strategic plan. A director who is a member
of board should ensure that the board acts
on a fully informed basis, in good faith,
ensuring due diligence and care are taken
into account. He should strive to see the
board apply high ethical standards and
account for interests of stakeholders.
In corporate governance circles, a director
is seen as a member of the board. He
derives his authority from the board and
not in person. This means that a director
as a person has no authority upon an
association but has authority as a board.
But in terms of liability, a director is
jointly and severally liable. The roles of directors take many forms.
In listed companies, various legislations
and statutory guidelines do come into
play. These do include special committees
as may be determined by NSE, stock
exchanges and other regulators. In the case
of non-listed companies, some, by-laws
and articles of association are variously set
in place to guide roles of directors, boards
of governors or council member or many
more on case by case basis.
In other words, director being a member
of board should assist the board to ensure
that corporate governance framework and A board member has a fiduciary duty and
responsibility to an association where
he serves as a board member. That is he/
As much as the board’s role is at the apex driv-
ing policy and strategic plan, the ultimate re-
sponsibility in a body corporate lies squarely on
the shoulders of the board not employees. The
board is jointly and severally liable if a company
goes under. So a board is to blame, for overall
action or inaction as far as a performance of an
association is concerned.
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she acts in good faith and is a trustee of
stakeholders. As for responsibilities of
board members, it is important to clarify
three issues in the context of fiduciary
duty. Fiduciary duty emphasizes the need
for duty of care, duty of loyalty, and duty
of obedience.
Director/board is important for the
ultimate direction of an organization. In
the case of major commercial companies,
a board is responsible for policy making
while employees (manager, supervisors) are
responsible for day to day implementation
of the boards policy and strategic plans.
However, in as much as the board’s
role is at the apex driving policy and
strategic plan, the ultimate responsibility
in a body corporate lies squarely on the
shoulders of the board not employees.
The board is jointly and severally liable if
a company goes under. So a board is to
blame, for overall action or inaction as
far as a performance of an association is
concerned.
A board can set up board committees.
In this case a board delegates authority
for some committee to act on behalf of
the main board. The deliberations and
resolutions of such committees may have
some board members and technical staff
from within or outside a company. At the
end of it all, their recommendations are
forwarded to a main board for ratification.
In other words, board committees have
no management authority except for