Other directors usually delegate their authority to

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chief executive officer and the most important of the executive directors. Other directors usually delegate their authority to the managing director who can act on behalf of the board and the company. He can exercise such powers as the board of directors could exercise. The board of directors of a company may appoint somebody from among its members to the office of managing director and other executive offices. It is also the duty of the board of directors to appoint and remove a managing director; the shareholders have no power to do this. However, a managing director would lose his office if the shareholders remove him as a director. 24.4.2 NON-EXECUTIVE DIRECTORS Non-executive directors are those other than the executives. They are directors who are not in full-time contractual employment of their companies. They do not have specific executive roles but take part in management on a part-time basis. They sit on the board of directors of and are bound by the same rules as other directors. However, unlike executive directors, they do not have to attend all board meetings. They have a duty, however, to attend whenever they reasonably can and to keep themselves informed of their company’s affairs. Non-executive directors are usually selected from the rank of professionals, political or public figures, or retired former executive directors and business people. Apart from acting as a check on executive directors, non-executives also bring influence and connections to the company. 24.4.3 ALTERNATE DIRECTORS An existing director may appoint another person to represent him at a board meeting when he could not attend. These persons are known as alternate directors and could be executive or non-executive. They could be an existing director or any other person. Before an alternate can be appointed, the articles of a company must authorize, and the board of directors must approve, the appointment. An alternate director is entitled to vote according to his own wisdom; and is not necessarily an agent of the director who appointed him. An alternate is bound by the same rules as other directors. Download free eBooks at bookboon.com
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BUSINESS ORGANISATIONS AND AGENCY 428 COMPANY DIRECTORS 24.5 APPOINTMENT OF DIRECTORS Directors may be appointed in different ways depending on whether they are the first or subsequent directors and whether they are substantive or interim. The subscribers to a company’s memorandum usually name the first directors of the company in the application for incorporation. In small private companies, these first directors are likely to be the subscribers or some of them . The members or shareholders of a company appoint subsequent directors at general meetings either to increase the number of board members or to fill vacancies. The articles of association will normally make provisions on the appointment of directors, although the members have an inherent power in this regard. Usually, the appointment of directors by the members require only an ordinary resolution. However, members must
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