Responsibilities oI directors and boards

The board oI directors is appointed to act on behalI oI the shareholders to run the day to day aIIairs oI the business.
The board are directly accountable to the shareholders and each year the company will hold an annual general
meeting (AGM) at which the directors must provide a report to shareholders on the perIormance oI the company,
what its Iuture plans and strategies are and also submit themselves Ior re-election to the board. The objects oI the
company are deIined in the Memorandum oI Association and regulations are laid out in the Articles oI Association.
The board oI directors' key purpose is to ensure the company's prosperity by collectively directing the company's
aIIairs, whilst meeting the appropriate interests oI its shareholders and stakeholders. In addition to business and
Iinancial issues, boards oI directors must deal with challenges and issues relating to corporate governance, corporate
social responsibility and corporate ethics. It is important that board meetings are held periodically so that directors
can discharge their responsibility to control the company's overall situation, strategy and policy, and to monitor the
exercise oI any delegated authority, and so that individual directors can report on their particular areas oI
responsibility. Every meeting must have a chair, whose duties are to ensure that the meeting is conducted in such a
way that the business Ior which it was convened is properly attended to, and that all those entitled to may express
their views and that the decisions taken by the meeting adequately reIlect the views oI the meeting as a whole. The
chair will also very oIten decide upon the agenda and might sign oII the minutes on his or her own authority.
Individual directors have only those powers which have been given to them by the board. Such authority need not be
speciIic or in writing and may be inIerred Irom past practice. However, the board as a whole remains responsible Ior
actions carried out by its authority and it should thereIore ensure that executive authority is only granted to
appropriate persons and that adequate reporting systems enable it to maintain overall control. The chairman oI the
board is oIten seen as the spokesperson Ior the board and the company.



Roles oI the board oI directors
The roles oI the board oI directors include :-
Establish vision, mission and values
O etermine the company's vision and mission to guide and set the pace Ior its current operations and
Iuture development.
O etermine the values to be promoted throughout the company.
O etermine and review company goals.
O etermine company policies
Set strategy and structure
O Review and evaluate present and Iuture opportunities, threats and risks in the external environment
and current and Iuture strengths, weaknesses and risks relating to the company.
O etermine strategic options, select those to be pursued, and decide the means to implement and
support them.
O etermine the business strategies and plans that underpin the corporate strategy.

O Ensure that the company's organisational structure and capability are appropriate Ior implementing
the chosen strategies.
elegate to management
O elegate authority to management, and monitor and evaluate the implementation oI policies,
strategies and business plans.
O etermine monitoring criteria to be used by the board.
O Ensure that internal controls are eIIective.
O ommunicate with senior management.
Exercise accountability to shareholders and be responsible to relevant stakeholders
O Ensure that communications both to and Irom shareholders and relevant stakeholders are eIIective.
O &nderstand and take into account the interests oI shareholders and relevant stakeholders.
O Monitor relations with shareholders and relevant stakeholders by gathering and evaluation oI
appropriate inIormation.
O !romote the goodwill and support oI shareholders and relevant stakeholders.

Responsibilities oI directors
irectors look aIter the aIIairs oI the company, and are in a position oI trust. They might abuse their
position in order to proIit at the expense oI their company, and, thereIore, at the expense oI the
shareholders oI the company.
onsequently, the law imposes a number oI duties, burdens and responsibilities upon directors, to prevent
abuse. Much oI company law can be seen as a balance between allowing directors to manage the
company's business so as to make a profit, and preventing them from abusing this freedom.
Directors are responsible for ensuring that proper books of account are kept.
n some circumstances, a director can be required to help pay the debts of his company, even
though it is a separate legal person. For example, directors of a company who try to 'trade out of
difficulty' and fail may be found guilty of 'wrongful trading' and can be made personally liable.
Directors are particularly vulnerable if they have acted in a way which benefits themselves.
O The directors must always exercise their powers Ior a 'proper purpose' that is, in Iurtherance oI the
reason Ior which they were given those powers by the shareholders.
O irectors must act in good Iaith in what they honestly believe to be the best interests oI the company,
and not Ior any collateral purpose. This means that, particularly in the event oI a conIlict oI interest
between the company's interests and their own, the directors must always Iavour the company.
O irectors must act with due skill and care.
O irectors must consider the interests oI employees oI the company.