A company director is one of the most vital parts of any business. The board of directors are the ones to steer an organisation with strategic decisions, and they are legally responsible for making sure the company fulfils its obligations and ultimately succeeds. Running a business isn’t easy, and that’s why multiple directors typically sit on a board, with shared responsibilities. In some cases, power is delegated to certain individuals or committees, depending on their expertise or the requirements of the situation.
The responsibilities of a company director
Company directors often act in the interest of the shareholders, and of the employees of a business, and have to manage the expectations that the role places upon them. Typically, in the UK there are seven statutory duties owed by the director, to their company. These are stated in the Companies Act 2006:
- Directors must work within their powers, under the rules of the company constitution, with care and diligence. This means acting in the best interest of the business, and within the agreed rules set about by the board.
- Directors must always promote the success of the company in every endeavour. They must look after the welfare of the shareholders and their employees. Board decisions must be made in the best interest of the company.
- Directors must always make independent decisions and judgement, without external influences.
- Directors must have reasonable care, skill and diligence, and be held accountable for their actions and decisions.
- They must declare any conflict of interests, such as material gain, that may influence the ongoing business developments brought on by the board.
- They cannot accept any benefits from third parties.
- Directors must not be affected by the financial interests of other parties and must declare any transactions or arrangements with the company.
It should also be noted that board meetings must be documented as minutes and kept for ten years, as a record of the board’s decision-making process.
Why is director data important?
When making informed decisions around credit risk, it can help to have real-time data and a reliable history of key individuals involved within that business. It is important to be aware of the hierarchy within an organisation, of key stakeholders and individuals, and the history of previous company directors. Director checks can also be a key part of your due diligence process, to ensure that you have the full picture of an organisation, including if the directors were involved in any previously dissolved or insolvent companies.
Director Dashboard Red Flag Alert Platform
Here are the top three reasons to discover a company director:
Reach key decision-makers
Company directors hold a lot of power and influence within a business and can make or break an ongoing strategy or decision. This can be an invaluable tool when prospecting, as knowledge about the directors can help you have a direct line into some of the most senior members of the business.
As mentioned in the Company’s Act 2006, Directors must act in the interest of the organisation first and foremost, to protect their employees and the overall business. Due to this, it is vital that you are aware of who they are, particularly if you are interested in working with the company in the future.
Find out indicators of a company’s health
Viewing the history of a company can provide unique insights and help avoid any unnecessary risks. Using the Red Flag Alert platform, you can assess a business’ creditworthiness by investigating information about current directors, and view their previous appointments in chronological order. This data allows you to make decisions based upon the length of time spent at each role, and what their success was. A director who has a history of poor financial decisions, or has been involved in multiple insolvent businesses, would certainly be a cause for alarm.
Using our ‘Scores’ feature, it is possible to review the health rating of a specific company and date it back to when they were the director. This helps you to understand what experience a director has, and how they have professionally behaved in the past.
Identity potentially negative trends
Although they typically have the right to resign whenever they want to, company directors usually stay heavily involved with a business. The only exception to this would be if they have a designated term. Top-level turnover and sudden changes in leadership can leave companies reeling and looking unstable from an external standpoint. If directors are suddenly resigning from a business without warning, this can be an indication that there may be trouble in the future.
There are many reasons why a director might resign. It could be because of unresolvable differences and disagreements with the wider board on a company’s direction. It could be a sign of greater financial trouble on the horizon or other unforeseen issues. If multiple company directors are jumping ship, this is overall a bad sign.
Previous and current Appointments of Richard Arnold
What information can you get from Red Flag Alert?
Using Red Flag Alert, you have access to UK-wide director reports. These allow you to identify current leadership structures and hierarchical changes in key appointments using real time data, as well as resigned directorships and any dissolved companies.
You can see key information such as their nationality, date of birth and address. To help undertake due diligence, you can also view the SIC codes of the companies they are associated with and even arrange them in health rating order for an intuitive and clear display. These reports can be exported into PDFs to ensure you can store the information internally if required.
Using these tools allows you to clearly see valuable and accurate information on every Director operating for a UK business. These insights provide a snapshot of the structure of key individuals in control of the organisation. To instantly access this data why not sign up for our seven day free trial today?