Every company must have a director
A director is a person who is appointed to lead and oversee a company, with legal and ethical responsibilities.
Every registered company must have at least one director, whose details are recorded with the Companies Office. This person must agree in writing to the role.
If you registered the company yourself, you may be the first director. Small companies may only need one.
Sole traders aren't legally directors but may still perform similar roles.
A director sets the vision and goals
Directors set the vision and long-term goals of the company. This includes the strategy to achieve the company’s goals, as well as the monitoring the company’s strategy progress.
Directors play an important role in ensuring the company complies with all necessary legislation and remains financially solvent.
The role of the director is to:
- consider the strategic vision for the company
- offer fresh thinking and additional skills and knowledge
- have networks to help the company grow
- act in good faith and in the best interests of the company
- have no conflicts of interest with the company
- ensure that the company remains solvent
- not take advantage of their position as a director for personal profit.
Appointing other directors
You can appoint additional directors when it suits your business needs – such as bringing in expertise or investment. Choose directors based on their skills, experience, and how they can support your strategic goals.
Directors don’t need formal qualifications but must meet legal requirements (for example, not being bankrupt). In companies with shareholders, most must agree to new appointments.
It's best to provide new directors with a letter outlining their role, time commitment, board duties, and any pay or benefits they may receive.
Laws that affect your company
As a director, you need keep up with your director duties, as well as following the laws relevant to your company. For example, you need to keep your staff safe at work, treat them well and give them what they’re entitled to, such as sick leave and holiday pay. You need to pay the right tax and operate in a way that’s honest and transparent.
You also need to make sure the products you sell are safe, fit for purpose and of good quality. Depending on the sector your company is in, you might need to follow other laws too.
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