Types of Company Directors and Their Duties

Every company, regardless of its size or sector, needs someone at the top to manage operations, ensure compliance, and provide direction. This critical responsibility falls on the shoulders of the company directors. Not only do they manage the daily operations, but they are also responsible for making crucial decisions that impact the long-term growth and sustainability of the business. 

Under the Companies Act, 2013, it is mandatory for every registered company in India to have at least one director. A One Person Company (OPC) needs at least one director, a private company must have two or more, and a public company at least three directors. However, not all of them have the same roles or responsibilities. Let’s take a look at the different types of business directors a company can have in India.

Managing Director

As the name suggests, a Managing Director (MD) is entrusted with powers and responsibilities of leading the company’s management. Appointed by the board or shareholders, the MD plays a vital role in overseeing the company’s operations and implementing strategic decisions. 

Additional Director

An Additional Director is appointed by the board of directors, typically to fill a temporary vacancy or to bring in specific expertise. This appointment is made through a board resolution.

Executive Director

They act as the mediator between the board of directors and the organization’s daily operations. Unlike non-executive directors, they work full-time within the company and are dedicated to the long-term objectives and visions of the company. 

There are various types of business directors in a company and they all serve a crucial role. They are an indispensable part of the company—making sure that the business runs smoothly and remains compliant and competitive in the evolving marketplace.