Of course, a non-executive director (even a non-executive chair of the board) is not involved in the day to day running of the company. A director is said to be “executive” when (s)he additionally holds another office or place for profit in the company. Thus directors may appoint one or more of their members to such offices on such terms as they may determine, except as auditor. They are called “Executive Directors.” (section 192 of Act 179)

The most typical executive director is the “Managing Director” who is “a director to whom has been delegated some of the powers of the board of directors to direct and administer the business of the company.” (Schedule 1, Subject 4 of Act 179)

Non-executive directors face a dilemma. They may not be at the company on a daily basis and might have delegated some of their powers of directing and administering the company’s business to a managing director to head a management team composed in part of other executive directors. But the law does not distinguish between the status, duties and liabilities of directors, whether executive or non-executive because directors are “those persons, BY WHATEVER NAME CALLED, who are appointed to direct and administer the business of the company.” (Section 179 of Act 179)

All directors are and remain “agents” of the company. Ferguson v. Wilson (1886) LR 2 Ch 77 at 89 held that directors are “merely agents of the company. The company itself cannot act in its own person, for it has no person; it can only act through directors, and the case is, as regards those directors, merely the ordinary case of principal and agent. Wherever an agent is liable those directors would be liable; where the liability would attach to the principal, and the principal only, the liability is the liability of the company.”

All directors are also in the position of “trustees.” In York & North Midland Railway v. Hudson (1853) 16 Beav 485, it was held that directors “are a person selected to manage the affairs of the company for the benefit of the shareholders. It is an office of trust which, if they undertake, it is their duty to perform fully and entirely.”

This dual character of directors is perhaps best expressed in G. E. Railway v. Turner (1872) LR 8 Ch 149 at 152 thus: “The directors are the mere trustees or agents of the company – trustees of the company’s money and property – agents in the transactions which they enter into on behalf of the company.”

So, abeg, before you accept any directorship of any company, make you pause and check yourself. 

Having said that, the chairman of the board, absent any specific power or responsibility vested in him/her by either the company’s regulations or the board, is in truth just a glorified ‘master of ceremonies’ at a board, general and committee meetings. His/her duties and responsibilities do not differ from that of any other director.

His/her voice may count or hold sway, based simply on some gravitas and respect that may come with the position. But his/her vote only determines matters when there is an equality of votes. (S)he has no generic or fundamental function or power inside or outside those meetings, which are any different from that of other directors.