company director

  

Definition

An appointed or elected member of the board of directors of a company who, with other directors, has the responsibility for determining and implementing the company’s policy.

A company director does not have to be a stockholder (shareholder) or an employee of the firm, and may only hold the office of director (see qualifications for directors). Directors act on the basis of resolutions made at directors' meetings, and derive their powers from the corporate legislation and from the company’s articles of association.

As the company's agents, they can bind the company with valid contracts entered into with third-parties such as buyers, lenders, and suppliers (see powers of directors). Directors are the trustees for the firm and not for individual stockholders, but they may be sued by the stockholders as personally liable for the consequences of the acts that are fraudulent or beyond their vested powers. Also, whether appointed validly or not, they are individually and collectively liable for the acts and/or negligence of the firm. (see liabilities of directors).

Unlike stockholders, directors cannot vote by proxy and, unlike employees, cannot absolve themselves of their responsibility for the delegated duties (see duties of directors). See also director.


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