How many of us are doing things which we never really set out to do? I always hope that I will wake up one day and know what it is that I want to be when I grow up. In the meantime, I’m just going to take the opportunities that come my way and that appeal to my sense of adventure. In this way I have somehow become a director. Ok, it’s a small company and is wholly owned by the council but size is not that important. The responsibilities of directorship are still the same.
I know this now as I attended a whole day of training on being ‘The effective director’.
Actually, I’ve been a director of the firm for a few years, I just didn’t know what that meant. I thought it was just a higher up management position but it just shows how wrong you can be. It is a position that comes with a whole string of responsibilities and potential consequences, including going to jail.
The law thinks about the company as if it was a person, as a legal personality and as a director you owe your duty to the company. A company can’t go to jail but you can.
Note to self – avoid going to jail.
The Companies Act is the largest piece of legislation to go through Westminster, ever. The most important thing I need to know is what it says in the company’s Memorandum and Articles of Association. We are legally obliged to have one and we must do what it says we are here to do, along with any other related activities the directors may see fit. They can be changed with the shareholders’ agreement, however. I must find where ours are. Finding memo?
The next thing I need to think about is how the company is governed. Governance is about how you to choose to run the company. There are three pillars of governance: transparency; accountability; checks and balances. All of these are there to prevent the abuse of power. Power still gets abused. Somehow I need to separate my role as an employee from that of a director. An executive director perhaps, in which the law thinks there are two of me. Can both of us go to jail?
Sometimes you shouldn’t enter into things lightly. You may get more than you bargained for. You may bite off more than you can chew. I may never have set out with this in mind but at least I know now.