CHALLENGES & IMPLEMENTATION:
Company being an artificial person it requires certain natural persons to represent the company at various fronts. The position of directors in their relationship to the company is not only as the agents, but also trustees of the company
Executive Director: The term executive director is usually used to describe a person who is both a member of the board and who also has day to day responsibilities in respect of the affairs of the company. Executive directors perform operational and strate gic business functions such as:
• Managing people
• Looking after assets
• Hiring and firing
• Entering into contracts
Executive directors are usually employed by the company and paid a salary, so are protected by employment law.
Examples of executive directors are production director, finance director or managing director or whole time director.
Section 2(26) of the Companies Act, 1956 defines Managing Director as - "managing director" means a director who, by virtue of an agreement with the company or of a resolution passed by the company in general meeting or by its Board of directors or, by virtue of its memorandum or articles of association, is entrusted with [substantial powers of management] which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called.
Provided that the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within substantial powers of management:
Provided further that a managing director of a company shall exercise his powers subject to the Superintendence, control and direction of its Board of directors;