Authorities of Directors &

CEO
M.Babar Saeed (12968)

Corporate Law
M Babar Saeed

Directors Of A Company
The Law recognizes a company, as a legal person which in its
own rights, is capable of owning property, making contracts,
conducting litigations and also responsible for doing wrongs.
When we look at these matters from practical angle and at the
way in which this artificial legal person functions; its corporate will
is manifested, its decisions taken and its acts performed, we see
that a company cannot do any thing at all except through the
human beings.
The Law recognizes a company, as a legal person which in its
own rights, is capable of owning property, making contracts,
conducting litigations and also responsible for doing wrongs.
When we look at these matters from practical angle and at the
way in which this artificial legal person functions; its corporate will
is manifested, its decisions taken and its acts performed, we see
that a company cannot do any thing at all except through the
human beings.

POWER/DUTIES OF DIRECTORS EXERCISEABLE

THROUGH BOARD RESOLUTION(PAKISTAN)
The directors of a company may exercise the following powers on
behalf of the company, and shall do so by means of a resolution
passed at their meeting, namely:
to make calls on shareholders in respect of moneys
unpaid on their shares
to issue shares
to issue debentures or any instrument in the nature of
redeemable capital
to borrow moneys otherwise than on debentures
to invest the funds of the company

 to make loans
to authorize a director to enter into any contract
between the company and associated undertaking for
making sale, purchase or supply of goods or rendering
services with the company
to approve annual or half-yearly or other periodical
accounts as are required to be circulated to the
members
to approve bonus to employees
to incur capital expenditure on any single item or
dispose of a fixed asset in accordance with the limits as
prescribed by the Commission from time to time;
to undertake obligations under leasing contracts
exceeding one million rupees
to declare interim dividend; and having regard to such
amount as may be determined to be material (as
construed in Generally Accepted Accounting Principles)
by the Board, to write off bad debts, advances and receivables;
to write off inventories and other assets of the company
to determine the terms of and the circumstances in
which a law suit may be compromised and a claim or
right in favor of a company may be released,
extinguished or relinquished.

POWER/DUTIES OF DIRECTORS EXERCISEABLE

THROUGH ARTICLES OF ASSOCIATION OF THE
COMPANY
The company through its Article of association may authorize/
restrict the duties of directors subject to the condition that these
restrictions/ authorization are not contrary to the Law e.g. law
requires a board resolution for capital expenditure and disposal of
fixed assets at Rs 1 million and Rs 1 lac respectively. However,
the company through its articles can further restrict this limit.

Powers of directors in UK(Company Act 2006)

The directors of a company are responsible for exercising all the
powers of the company. The extent of these powers are defined by
the Companies Act 2006 and may be amended by the articles of
association. For example the articles of association may restrict the
borrowing powers of the directors. The directors generally act as a
board but the articles of association may permit the board to
delegate powers to individual directors. In companies with a number
of directors it is not unusual for an individual directors to carry
out many of the companys activities without reference to the other
directors. The Companies Act 2006 also includes one specific
statutory power, which allows the company to make provision for its
employees.

Powers of directors in india(Company Act 1956)

The CA1956 has not codified the law relating to duties of directors but
in all cases all directors must ensure compliance with the provisions of
the CA1956 and other applicable laws. Further, under the CA1956 the
directors of Indian companies are subject to common law duties. Thus,
a director has fiduciary duty towards the company.
For listed companies (companies of which shares are listed at Indian
stock exchange), Securities and Exchange Board of India requires
nomination of certain Directors designated as Independent Directors.

For public sector undertakings, respective Government nominates

directors on behalf of the respective Government.
Various public sector financial institutions, financial institutions and
banks having participation in equity of a company also nominate
directors to the board of such companies.
Directors nominated by the Government under s.408 of the CA1956.

Chief Executive Officer

A chief executive officer (CEO) is generally the most senior corporate officer
(executive) or administrator in charge of managing a for-profit or non-profit
organization. An individual appointed as a CEO of a corporation, company,
organization, or agency typically reports to the board of directors. In British
English, terms often used as synonyms for CEO include managing director
(MD and chief executive (CE)
CEO is one of the most coveted, and least understood, jobs in a company.
Everyone believes that CEOs can do whatever they want, are all powerful,
and are magically competent. Of course, nothing could be further from the
truth. By its very nature, the job description of a CEO means meeting the
needs of employees, customers, investors, communities, and the law. Some
of a CEOs job can be delegated. But several elements of the job must be
done by the CEO

The responisbilities and powers of a CEO include:

Has the power to Creating, communicating, and implementing
the organization's vision, mission, and overall direction. Leading
the development and implementation of the overall organization's
strategy.
Power to evaluate the work of other executive leaders including
presidents, vice presidents, and directors, depending on the
organization's reporting structure.

 Power to ask for advice and guidance, when appropriate, from a

Board of Directors.
Formulating and implementing the strategic plan that guides the
direction of the business or organization
Representing the organization for civic and professional
association responsibilities and activities in the local community,
the state, and at the national level. (Other executive leaders bear
responsibility for these vetures as interested or assigned as well.)
To monitor the Company's daily operations, as well as to
supervise the undertakings of each of its operational units and
organizational sectors, as well as the discharge of duties of the
Company's employees in all areas.

International Differences In CEOs

In some European Union countries, there are two separate
boards, one executive board for the day-to-day business and one
supervisory board for control purposes (selected by the
shareholders). In these countries, the CEO presides over the
executive board and the chairman presides over the supervisory
board, and these two roles will always be held by different people.
This ensures a distinction between management by the executive
board and governance by the supervisory board. This allows for
clear lines of authority. The aim is to prevent a conflict of interest
and too much power being concentrated in the hands of one person.
In the United States, the board of directors (elected by the
shareholders) is often equivalent to the supervisory board, while the
executive board may often be known as the executive committee
(the division/subsidiary heads and C-level officers that report
directly to the CEO).
In the United States, and in business, the executive officers are
usually the top officers of a corporation, the chief executive officer
(CEO) being the best-known type. The definition varies; for
instance, the California Corporate Disclosure Act defines "Executive
Officers" as the five most highly compensated officers not also

sitting on the board of directors. In the case of a sole

proprietorship, an executive officer is the sole proprietor. In the case
of a partnership, an executive officer is a managing partner, senior
partner, or administrative partner. In the case of a limited liability
company, executive officer is any member, manager or officer.