Directors

de jure directors

Person who is formally and legally appointed or elected as a director in accordance with the articles of association of the firm, and gives written consent to hold the office of a director. He or she enjoys full rights and privileges of a director, and is held individually and collectively (with other directors) liable for the acts and/or negligence of the firm.

de facto directors

Person who is not a de jure director but performs the acts or duties of a director, or is judged to be a director in law. Any person who is not technically a director but according to whose directions and instructions (rather than expert or professional advice) other directors and/or employees are accustomed to act is legally deemed a de facto director. Whether or not such person fulfills the qualifications of a director, or enjoys the rights and privileges of a director, he or she is generally held liable as a de jure director.

shadow directors

Holder of controlling or majority stock (share) of a private firm who is not (technically) a director and does not openly participate in the firm’s governance, but whose directions or instructions are routinely complied with by the employees or other the directors. In the eyes of law, he or she is a de facto director and is held equally liable for the obligations of the firm with the other de facto and de jure directors.

executive directors

A working director of an organization who is usually also its full-time employee, and has a specified decision making role as director of finance, marketing, operations, etc., on an on-going basis.T his title is more typically used for nonprofit organizations than for commercial enterprises.
The standard of care required from executive directors is much higher than that required from non-executive directors, but both types of directors are equally liable under tax laws. Also called inside director or internal director.

non-executive directors

Non-working director of a firm who is not an executive director and, therefore, does not participate in the day-to-day management of the firm. He or she is usually involved in planning and policy making, and is sometimes included to lend prestige to the firm due to his or her standing in the community. Non-executive directors are expected to monitor and challenge the performance of the executive directors and the management, and to take a determined stand in the interests of the firm and its stakeholders. They are generally held equally liable as the executive directors under certain statutory requirements such as tax laws. Also called external director, independent director, outside director, or director at large.

OK?

I presume that you have he answer in front of you so this is a test, is it?

Neither is de jure and neither is non-executive

Ger is a shadow director and Kim is a de facto director

It appears that the business (is it a company?) has no directors!

Ger is criminally liable in breach of a Court banning order

Kim is professionally at fault (he can’t be ACCA because no ACCA qualified person would do that

There’s enough about neds in the course notes for you to gather together 2 marks

Ok?

And, in future, I’m here to help you. I’m not here to be tested by you. If you have a problem with something that you have read or otherwise come across, then ask me to explain, but don’t set me test questions!