What is in a name?
There was a lively debate recently on the IoD LinkedIn Group about the use and abuse of the word ‘Director’ in the corporate world.
When is somebody who is refered to as a director really a director, with all directorial powers (and the strings attached) and not for example a manager in disguise with an inflated title? There are considerable differences between directors and managers.
Well, there is really no shortage of various directorial nametags: managing director (more favoured in the UK), chief executive (more favoured in the USA), chairman, non-executive chairman, vice-president, president, non-executive director, executive director, company secretary, nominee director, de facto director, de jure director, shadow director, alternate director, associate director, finance director, HR director, CEO, CFO, COO, CIO, the list just goes on. I even know somebody whose title on the business card is ‘Only Executive Officer’.
Not all of them will be registered with Companies House, but legally, a director is a director, regardless of their name or title. And what’s more, one can be a director in the eye of the law without being officially called one. If somebody in a company, who can be, for example, a Sales Manager as titles go, regularly gives advice to the directors of the company, who then customarily act in accordance to that advice, that Sales Manager becomes a shadow director in the eye of the law, and will bear the grunt of all directorial responsibilities and liabilities, which are substantial.
But as somebody on the IoD Group discussion forum said, “the title doesn’t matter, it’s more about the role holder understanding their responsibilities and performing the role well.”
To me, being a simple sort of person – this one is easy! A director, accorind to the Oxford English Dictionary is someone who is “a person in charge of an organization or activity, a member of the board managing a company” and as pointed out, is registered with Companies House. I suspect most others fall into the other description in the Dictionary – “a person who directs a play”!!!
There is a well-established test as to whether somebody is a director of a company. That is the person has a direct influence and control over the direction of the business and the people within it. It is certainly not about titles, although a Managing Director is likely to be a “director” of the business, as is a Non Executive Director – they are especially vulnerable to prosecution, although many of them do not appreciate that fact. But also an Interim Manager who may not be on the payroll but who is contracted to do a job in the company for a period, may well be a “shadow director”, i.e. not a director in title or registered at Companies House, but who fits the description above. However, a “Director of *****” may not be considered a director of the company in law – it depends what the role is.
First, I lay claim to the quote at the end of Anna’s post here and still reckon the title doesn’t matter, it’s more about the role holder understanding their responsibilities and performing the role well.”
The Oxford English Dictionary quotation says a director ‘directs an organisation “or activity”‘, which implies you can have people directing departments rather than companies who are equally valid ‘directors’.
Imagine this scenario -you’ve got an HR Director controlling a £5M budget with 150 staff, and a Managing Director of a small business with a £200K budget, and 4 staff – is one more of a ‘director’ than the other?
I prefer the title ‘leader’ to any other title as it is more explicit in what is expected of anyone in a ‘director role’ i.e to lead by example, rather than occupy a grand office office with a leather chair, and the title ‘Director’ stuck on their office door in gold plating.
Again, it’s more about the impact we have as leaders, rather than our job title.
Sorry, and to add to that, maybe the question we need to also be asking ourselves is ‘when is a director NOT a director?’. Would be interesting to see views on this in future.
I have to admit, it was me who placed the original question on ‘Linked In’.
The point I was making, referred to specific a company (whether Limited or a PLC).
As previously a Commerical Director and now Managing Director (both being Company Directors, as registered with Companies House), I was questioning whether is should be allowed for the title Director to be used when a person is not a Director registered with Companies House.
Can someone tell me about the role of ‘Associate Director’ – and if it carries the same legal reqs as a Director?
Is the MD title appropriate as a new star up, initially a one man show?
Is the MD title appropriate as a new star up, initially a one man show?
It is appropriate as that person will have the same legal obligations if they are a Limited Company. However, I do agree that some use the title as a badge of honour and prestige without realising the legal implications of being a Director.
One can be a Director without being a leader. Even in some relatively small firms, some Directors rarely lead the management or staff, but instead focus fully on strategic affairs. Whilst this is organisational/strategic leadership it is not the same a leading people.
I have recently been offered a Directorship of the company I work for, however they are concerned about the Liabilities that I may incur as a Director. I have been asked to investigate other options apart from using the word Director in my title, does anyone have any ideas?