When is a director really a director?

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.”

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About Anna Burmajster

As Head of Information and Advisory Services, Anna and her team are responsible for helping members get the information and advice they need in order to run their businesses profitably and to the highest standard possible. Their enquires include; helping members to understand the implications of the latest employment legislation; battling with tax complexities; ascertaining member companies' competitors or advising on the steps to opening an office overseas.
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