Directors role & responsibilities in a private company
A new publication from the ICAS Business Policy Committee on the role and responsibilities of directors in private companies.
ICAS has extended its range of practical guides for company directors with a new publication outlining the roles and responsibilities that face directors of private companies. ICAS Senior Vice-President Alan Thomson, who has written the foreword to the guide, said the guide was developed in response to the fact that many directors of small businesses arrived at the position because they were entrepreneurs or exceptional employees, rather than having any experience as a director.
The new guide is designed to help identify the duties and responsibilities of individual directors, other expectations of a director from the board and shareholders, and the potential risks to each director. It also outlines a number of practical measures that should help a director fulfill his or her role and to manage the risks effectively. It lays out a series of practical considerations for directors, covering everything from how much information directors should receive to what are appropriate levels of risk management and internal control and what steps should be taken if the company gets into difficulties.
It points out that the Companies Act 2006 codified the duties of directors, and the guide lists seven general duties that directors should consider to identify whether and how they have fulfilled their duties.
In a range of appendices, the guide also looks at areas such as company documents, compliance schedules, company governance, and appointing and inducting directors, along with sources of other useful information.