About directors

It is the function of the directors of a company to direct the management of its business and affairs.  They may do this directly or through employees or agents of the company.

These notes highlight some important points about directors.  The Companies Ordinance (particularly Part II, Division D) gives more details.

Appointments

The members of the company decide who should manage the company on their behalf.  They do this through elections at a general meeting.  Details of the first directors of a new company are notified to the Registrar of Companies on Form 2.  Further appointments are notified on Form 4 and changes in personal details on Form 5.  When a director’s appointment ceases, for whatever reason, this is notified on Form 9.

Directors are normally appointed for a fixed period, following which they may stand for re-election.  They may resign at any time or may be removed by a resolution passed at a special meeting of the shareholders.  

Number of directors

A private company must have at least one director.  A public company must have at least three, at least two of whom are not officers or employees of the company or any of its affiliates.  (An affiliate is a subsidiary, a holding company, another subsidiary of the same holding company or another company controlled by the same person.)  These are minimum provisions stated in the Companies Ordinance, but the company’s own articles of incorporation may specify the number of directors or define minimum and maximum numbers.

Who can be a director

A company cannot be a director of a St Helena company.  Any individual can be a director unless they are -

• under 18 years of age

• declared by a tribunal to be of unsound mind

• bankrupt

• disqualified by the Court from being a director

The Companies Ordinance does not require that a director should own shares in the company he or she manages, but the company’s article may require this.

Authority of a director

The board of directors exercises authority over the company’s affairs when acting collectively.  The board may however give authority to a director, or two or more directors acting together, to enter into commitments on behalf of the company.  The level of authority is stated on Forms 2 and 4.  Any change in the level of authority is notified on Form 11.

The first meeting

When a new company has been incorporated, the directors should hold a meeting to consider whether they should –

• make by-laws

• adopt forms of share certificates and corporate records

• authorise the issue of shares

• appoint officers

• appoint an auditor to hold office until the first annual meeting of shareholders

• making banking arrangements

• transact any other business.

An officer in this context may be a chairman, deputy chairman, president or vice-president of the board of directors, a managing director general manager, comptroller, secretary or treasurer or the holder of any similar office.

Private companies are not normally required to appoint auditors.

Duty of care

Every director or other officer must

• act honestly and good faith with a view to the best interests of the company, and

• exercise the care, diligence and skill that a reasonable prudent person would exercise in comparable circumstances

The interests of the company are those of the employees and the members collectively, which may be different from those of the particular director concerned or of any individual member.

A director is expected to disclose any personal financial interest he may have in any contracts which the company has entered into or is considering.  A director could be personally liable if he knowingly makes decisions which adversely affect the company.

Back to Introduction