An Overview of the Director’s Role and Responsibilities

In order to manage a company’s daily operations, directors play a crucial role. The purpose of an organization is to achieve the objectives set out before it was formed. Because an organization is an artificial person, it cannot fulfill those objectives. For this reason, a company appoints a board of directors. Among the duties that directors ought to perform are:

  • Develop progressive strategies and implement them;
  • Prepare statutory documents and file them with the company’s office;
  • Shareholders should be summoned to annual meetings;
  • Keep financial records;
  • The articles of the company require directors to act in accordance with them;
  • For the benefit of employees, members, shareholders, and others, the directors should work towards the interests of the company;
  • Seal contracts with lenders, suppliers, or other businesses with which the company is involved.

When a director breaches any regulations and does not perform his duties well, the company can go through the process of removing him.

Directors’ Types

Companies must appoint various types of directors regardless of their business structure. The Companies Act categorizes directors in the following ways:

  • A director who lives in India
    Generally, companies should appoint directors who have lived in India for at least 182 days in the previous year.
  • Director of Small Shareholders
    A listed company will have a director that will be elected by small shareholders after receiving notice from a minimum of 1000 small shareholders or 10% of the total number of small shareholders, whichever is less.
  • Director nominee
    – A nominee director is an individual appointed by financial institutions, banks, and other entities to monitor financial assistance.
  • Director Women
    Regardless of whether a company is public or private, it must appoint at least one woman director.
  • It is a listed company whose securities are also traded on the stock exchange.
  • The company must have at least INR 100 crores in paid-up capital or an annual turnover of at least INR 300 crores.
  • Director (Additional)
    Immediately prior to the next Annual General Meeting, this is an additional director.
  • Board members appoint alternate directors in the event that a director is absent for more than three months.
  • An independent director is a non-executive director who helps the company improve its corporate credibility and governance.

Question and Answer Section

  1. What form do a company’s shareholders use to remove directors?

    It is necessary for shareholders to file Form DIR-11 and Form DIR-12, along with all attachments associated with the Board Resolution, as well as an ordinary resolution.


  2. Are members provided with a notice period of how many days?

    It is required that the members give 21 days’ notice before holding another general meeting.


  3. What regulations govern the removal of Directors?

    According to the Companies Act, 2013, section 169 provides for the removal of director by shareholders


  4. Before removing a director, what are the preconditions?

    Removing a director requires giving the Director a chance to explain why he should not be removed.


  5. When a company director resigns, what format should be used?

    As part of the board resolution, the resignation will be passed in the following format: “RESOLVED THAT the resignation of (Director’s Name) be accepted immediately”.

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