The Responsibilities of a Board of Directors – Part One

board of directors

The board of directors is a phrase commonly heard of, whether it is about Eskom, SAA, or a private company. However, the layman may not know the exact definition of that role and who may qualify to take up such a position.  This article series seeks to introduce the board of directors; describe their role and responsibilities and further identify their daily activities.

The Companies Act 71 of 2008 defines a board of directors as a group of individuals who are appointed with the responsibility of the management of a company. These individuals have the authority to delegate such powers and functions to other parties, but overall are responsible for ensuring that the fiduciary interests of the company are upheld. However, a director is defined as someone who is a member of the board of a company, this being an individual who occupies the position of a director.

There is a range of different types of directors. An alternate director is an individual appointed in substitution for a particular elected or appointed director of that company. This means that the alternate director does not hold the position permanently. An individual may also occupy the position of a director, but not permanently be in such a position nor be formally appointed to such position. It should be further noted that the name or designation of a director is not a necessity to fulfill such a position. The substance of a person’s activities determines whether or not they satisfy the definition of a director. These “unappointed” directors are known as de jure directors. This also leads to the understanding that the definition of a director is not limited to those who are formally appointed and those who have accepted such appointments.

The board of directors are individuals who are responsible for the fiduciary interests and management of a company. Due to this, the board of directors must be made up of individuals who hold knowledge and experience in the field of finance, this may be in the form of an accounting or auditing background. However, this is not the only essential background needed for the member of a board. There should also be individuals with a legal background, as well as one that maintains the company’s ethos and social well-being. The board of directors must be made up of a wide variety of individuals, some chosen for their educational background while others are chosen for their experience.


Should you require assistance in any aspect of company law, contact us and we will gladly assist.


Saeedah Salie
Candidate Attorney


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