Have you been elected to join your company’s board of directors? Congratulations! But what is your job description? As you are very excited about your new position, remember that there are duties to ensure that the company moves forward.
In this post, you will learn the responsibilities a company director has. With adequate information, you will execute your duties accordingly. Whether you are the director or one of the company’s board of directors, you have to fulfill your obligations for the company’s success.
These are five essential roles a company director needs to execute.
1. Protect and Enforce the Company Constitution
The rules you set when starting a company are the core of the business. Their fulfillment is one of the main duties of a company director. But these rules are not mere writings. The articles of association are vital for effective and successful business operations. The document contains all the information you need to know about running the company and its objectives.
As a director, this document should guide all your operations. In whatever you do, you should stick to the rules outlined in the constitution. Remember to apply it as the manual for the company. All the guidelines you need to run the company are stipulated accordingly.
Therefore, you should not make decisions against the intended methods of operation. Otherwise, you would be liable for any losses or damages that arise from your careless and irresponsible behavior. You might get fired or even fined or prosecuted for ill intentions.
2. Record, Pay, and File Company Taxes
All business operations must abide by governing rules. Wherever you are in the world, your business has to pay taxes for all the profits you generate in the business year – in most cases, it ends in December. As a director, you are the only person with obligations to transact on behalf of the company.
All the business accounts and due taxes should be in your possession. You need to pay the government the taxes and file returns for the business. In various jurisdictions, the employer is responsible for tax payments of all the workers. From the employees’ income, you can calculate the taxes and submit them to the government. Remember that you are also an employee of the company.
3. Develop Company Objectives
Every business dreams to grow and reach greater heights. The ambition of company directors should be to help the company reach the intended goals. You know that the growth of the company is why you were appointed the director in that firm.
Understanding the market, competition, budget estimates, business liquidity, and assets is vital to create significant goals for the company. With short-term milestones, you can move the business from one step to another. The ultimate goals are achievable through growth and measurement of success.
Anything that does not bring a positive yield to the company should be paused and sent back for review. If there are ways to amend it, do so to boost its performance. Ideas and implementations that stagnate the business are not worth the effort.
4. Provide the Ultimate Direction
Directors occupy the topmost positions in the company. All responsibilities lie under them. When you have monumental changes coming, you are to make informed decisions on behalf of the company. The other management team can work closely with you and provide their views. However, your decisions should be independent of any party.
To grow the business, you should assess the current standing and ability to accommodate any significant developments. While other people can provide their views, you can only use your experience to leap. Do not allow your business decisions to be swayed by company shareholders. If you are a director that reports to a board, you can consult with them.
Another mistake to avoid is making conclusions for the company using case studies from other established firms. Professional consultants are vital when seeking opportunities and ways to expand your business. But still, your decision impacts your company, and you, as the director, are answerable for every outcome.
5. Keep Company Records and Reports
Records are vital in any business setting. You will need the information they contain for every milestone your company needs to accomplish. Reports will help you to understand how every previous investment step worked for or against your growth goals.
Some of the reports you need include:
- Business inventory stock
- Market analysis
- Financial reports
- General business performance
Keep the records safe for future auditing. Your records and reports can help your company expand and sustain your position. On the other hand, poor performance would mean losing your job position. But lost documents could be worse.
Company directors are the cornerstone of any business. While forming a company, you should pick an experienced person to hold the position because of its heavy responsibilities. Due to the demands that the office holds, you need a competent candidate to occupy it. Let their work history and educational background vouch for their candidacy before you ask for referees.