If you work in a large company you might have a Sales Director, who is then responsible for all the sales the business makes. But their director title is a bit of a misnomer; they are probably not a company director listed as such by Companies House.
Every company has at least one director who is on the public record as responsible for that business. You can search any business in the UK for free via the Companies House website and find out who the directors are.
Directors are legally responsible for the business and they have a few obligations. I think the three most important are:
To act in the best interests of the business.
To file the required documents on time – for example the annual accounts and confirmation statement.
Not to continue trading when the business is insolvent, i.e. it can’t pay its bills on time.
There can be two types of directors in a business – executive and non-executive. Executive directors are generally salaried and manage part or all of the business. The CEO and Finance Director are examples of this type of director. Non-executive directors may not be salaried and generally don’t work full time. They bring a certain expertise to the business and they may be given specific responsibilities - to oversee exec remuneration, to support manufacturing & operations, run the annual audit (if you have one) or to represent the interests of shareholders.
All directors sit on the Board of Directors and they all have the same legal responsibilities. Companies House doesn’t distinguish between exec and non-exec – everyone is in the same boat.
So the bottom line is that a non-executive director, who may not know the detailed, every-day workings of the business, is legally and personally responsible that things are done properly. That's why I always ask for a statement about the cash runway at each Board meeting when I sit as a non-exec.
Remember that if you’re offered a board seat in the future.
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