The concept and nature of Company was explained in the previous lesson. It has a endless life span and the life of the company is not affected due to changes in the members i.e any member may come and go but the company lives till its death according to the provisions of the Act. In this lesson, how this artificial person is managed is discussed. It is managed by a group of human beings.
The group of human beings who undertake the responsibility to run the business of the company are known as Board of Directors and the members of the Board individually called as Director. The Directors play a vital role in the functioning of the company by controlling, guiding, directing and managing the affairs of the company. The overall performance of any company is vested with the directors. So they are responsible for it. The every person in the Board individually or collectively is responsible for achieving the objectives prescribed in the Memorandum of Association of the Company. The appointment of Directors and their qualifications are specified in the Companies Act 2013 Chapter XI.
In the Company Management, Board of directors gets nucleus position and their selection is according to the procedure prescribed lay down in the Act and the Articles of Association.
Since the Success of any company depends on the efficient functioning of its Directors, they can be called as eyes, ears, brain, hands, nerves and other essential parts of a company. The directors formulate policies and establish organizational set up for implementing those policies, in order to achieve the objectives contained in the Memorandum of association of the company.