What does a Director do?

It’s not just a position you give to someone on their business card. Being the director of a company has its responsibilities and by law every private company in New Zealand requires at least one of them.

Essentially the duty of the director is to ensure the smooth running of the company. Well, what does that mean in practice?

Directors are not just a ‘rubber stamp’.  They don’t just go along with everything that management puts forward. They have to be fully informed about the company’s operations and the industry in which the company operates, and keep up-to-date with how the business is performing. They need to make their own enquiries in relation to proposals that have been put forward by management.

At all times directors should act honestly and should not use their position as a director to improve their own financial position.

The law expects directors to be diligent in the discharge of their duties. This means that they should:

Directors should ensure that meetings are held regularly to keep abreast of what’s happening.