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A director is responsible for the success of a company, whilst ensuring it’s compliant with any regulations. It’s a lot of work, so sometimes two or more directors share the responsibility.

Typically though, one director takes overall responsibility for a company, becoming the managing director (or MD). Normally there is only one MD at a time. Too many cooks spoil the broth, as they say!

Are there different types of company director?

There are indeed two types of company director; executive, and non-executive. They’re largely the same, except non-executive directors usually have little to no involvement in the general running of the business.

What does an executive director do?

Executive directors are responsible for looking after the company on a day-to-day basis. This can include anything from buying and selling assets, recruitment, HR, finance, or negotiating contracts.

If there’s more than one director then they’re often responsible for a specific function in the company, such as a director of finance. Directors of a company are also responsible filing accounts with Companies House. It’s the directors who may be fined if anything is late!

Our video guide to the role of a company director explains their obligations in a little bit more detail.




What’s the point of having a non-executive director?

A non-executive director is usually only part-time, and they typically concentrate on specific projects. Their role is to provide an objective view of the business, and improve its effectiveness.

They won’t deal with the day-to-day stuff, but they will be involved in the planning and policy-making which helps to steer the company.

So what does a managing director do?

Managing directors are sometimes also known as a Chief Executive Officer, or CEO. Essentially, they are the director who leads the activities of the other directors in the business. A company usually only has one managing director at a time.


accountants for limited companies

Does my company need a director?

It’s a legal requirement for a private company to have at least one director. A public limited company must have at least two directors, and these must be separate to the company secretary. The company secretary of a public limited company must be suitably qualified before accepting the role.

Need help with your accounts? Get started with an instant tailored quote, call us for a chat on 020 3355 4047, or learn more about our company formations service.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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