There are different types of directors. The directors of a company are eyes, ears, brain, hands, nerves and other essential limbs, upon whose efficient functioning depends the success of the company. In order to enable a company to live and to achieve its objectives, the director acts as an agent to en route in a right way.

why Directors?


  • The directors formulate policies and establish organizational setup for implementing those policies and to achieve the objectives as contained in the Memorandum.
  • Muster the resources for achieving the company objectives and control, guide, direct and manage the affairs of the company.
  • Directors as a body, frame the general policy of the company, direct its affairs, appointing the suitable company employees, and ensuring that they carry out their duties and responsibilities. Recommend to the shareholders about the distribution of dividend.

Types of Directors:

Two important directors are there, they are (i) executive directors or whole-time directors with the designation as managing directors, executive directors, and technical directors. (ii) Non-executive or part-time directors who are professionals and do not depend on their company rather they serve on the board of directors of a number of companies.

The Broad classification of “Directors”:

Inside Directors:


Those directors are the one who is in the whole-time employment of the company. It includes a technical, executive, managing director etc.

Outside Directors:


Those directors who are not in the whole-time employment of the company and they will not be associated with day-to-day working. They will be called in different types as nominated directors, professional directors, statutory directors.

Professional Directors:


They are specialized in different fields of management with extensive knowledge and experience in assisting and improving the given organization. They are in a position to offer suggestions for formulating a company’s policies and their income is derived principally which they receive from the companies on whose boards they serve.

Nominee Directors:


Those directors are appointed by financial institutions or banks which extend to financial assistance/term loans or working capital assistance to companies. They are mainly used for project supervision, monitoring, and control, particularly following the issue of government guidelines.

Special Directors or executive Directors:


Those are the full-time employee of a company and is given this designation in order to appreciate his merit and his usefulness to the company. Such directors will not be a board member and cannot be considered as a director within the provisions of the companies act.

Independent Directors:


They are the one who is apart from the director’s remuneration and do not have any pecuniary relationship or the transactions with that concern. Since because the promoters, management, or its subsidiaries who are in the judgment of the board may affect the independence of the directors.

Interested Directors:


Those are the ones who are used purposely for the quorum meeting with the board members for any discussion or any matter.

Government Directors:


The central government is the authoritative power to appoint the directors under section 408 of the act.

Whole-time director:


Whole-time directors are the one who devotes all his time and attention to the management of the company. He will act as a sale, technical, legal and work director since he is the whole-time director of the company.

Managing director:


Managing directors are the one, by virtue of an agreement with the company or the resolution which is passed by the company in the general meeting or by its board of directors or by virtue of its memorandum or articles of association entrusted to the managing power of the company.

The managing director’s power is substantial so that he can decide matters such as the appointment of the employees, selling and buying, control and direct the company’s board of directors.

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