DIRECTOR AND CEO: WHAT IS THE DIFFERENCE?

In the process of registering your company within the AIFC, you’ve likely encountered the necessity of furnishing information about both your Chief Executive Officer (CEO) and Directors. The distinct responsibilities tied to these roles are typically well-defined in the company’s Articles of Association. Today, we’ll shed light on the key differences, basic requirements for each role, the appointment process, and the distribution of their authorities.

Director:
◽ Appointed based on a written decision by the incorporators
◽ The first directors of the company are elected by the incorporators to run the company on their behalf
◽ Acts in accordance with the Constitutional Documents
◽ A private company must have at least 1 director and a public company must have at least 2 directors

AIFC Companies Regulations highlights the following duties of a director:
• duty to act within powers
• duty to promote success of company
• duty to exercise independent judgement
• duty to exercise reasonable care, skill and diligence
• duty to avoid conflicts of interest
• duty not to accept benefits from third parties
• duty to declare interest in proposed transaction or arrangement

CEO (Chief Executive Officer):
◽ Appointed either by the Shareholders or Directors
◽ Represents the company’s interests when interacting with external parties
◽ Should possess an Individual Identification Number (IIN)
 
Note: A company may appoint same individuals for Director and CEO positions. However, if these roles are held by different individuals, their duties and responsibilities must be clearly delineated.

Delve deeper into the specifics of these roles by checking the AIFC Companies Regulations and other acts: https://lnkd.in/g7SxMdcR