Issue link: https://htpgraphics.uberflip.com/i/116729
Shareholders and Directors Section 4 Directors' Powers The directors are granted their powers by the Articles of Association of the company. The Articles usually provide the directors with the power to manage the business of the company and to exercise all the powers of the company itself. In addition to the actual powers granted to the directors under the Articles of Association, directors may have "ostensible" or "apparent" authority when dealing with third parties, due to their position as a director. A director will bind the company if he or she enters into contracts with actual or apparent authority, regardless of whether he or she did in fact have such authority. If a director purports to enter into a contract with a third party, the director may be personally liable to that third party for any breach of warranty of authority. Therefore, as a director you must ensure that when you enter into a contract you not only have authority from the company to enter into it, but also that you are clear that you are acting on behalf of the company and not personally. The decisions made by the board of directors are usually taken on a majority voting system. If there is an equal number of votes, the director nominated as chairman of the board of directors may have a casting vote to determine the matter. The chairman is in theory nominated by the other board members. In practice, where third party funders are involved, it is likely that the funder will insist on the right to appoint the chairman. The basic position, however, is that, regardless of how or by whom a director is appointed, he or she owes his or her first duty to the company. Directors should be chosen for their relevant expertise and strategic-thinking abilities. Directors' Duties Extensive duties are imposed upon the directors of all companies. Directors' duties are owed by each director individually. Directors must act in the company's best interests (ie make corporate decisions properly). This typically affects the directors as a body. They must all actively participate in the decision-making process and not attempt to abrogate their responsibilities. 23