Board of Directors

Board of Directors

The board of directors is the executive arm or directing mind of the company. Section 66(1) of the Companies Act provides that the board of directors is responsible for the exercise of the company’s powers and functions, and the management of the company’s affairs. The powers of the board of directors can be limited only in terms of the Companies Act, or through the company’s Memorandum of Incorporation.

The board of directors exercises its powers primarily through passing resolutions.

Who is a director?

A director is defined as ‘a member of the board of a company as contemplated in section 66, or an alternate director of a company and includes any person occupying the position of a director or alternate director, by whatever name designed’ in section 1 of the Companies Act.

In essence, this definition includes formally appointed directors, as well as other members of the company depending on their status, office, or the powers they can exercise. The most common forms of directors are those appointed in terms of the company’s MOI, those who are directors because of the position they hold within the company (ex officio) and those who occasionally serve as directors - otherwise known as alternate directors. There are other forms of directors that are defined in terms of the common law.