How is the statutory director appointed?

To run a company, a director must normally be appointed and he or she has ultimate responsibility for the results. This means that there is a large burden on his shoulders and therefore a very capable person must be in charge . Companies stand or fall by their decisiveness and persuasiveness in directing the activities to achieve the business objectives. What does a statutory director do and how is he hired?

Appoint statutory director

  • Main distinction in directorship
  • What should one do?
  • How is the statutory director appointed?
  • Is the new leader adequate?
  • Policy settlement
  • New director through change management

Main distinction in directorship

The way in which a director is appointed forms the basis of the mutual relationship with the company. The following differences can be noted:

  • director who has automatically acquired the title by setting up the company himself. This is the actual director, also called the titular director:
  • director who has been hired as director due to an appointment, or the statutory director.

These two main forms can then be further subdivided into financial, general, part director and so on. Normally this will be established as a statutory relationship.

What should one do?

The aim of appointing a director is to achieve good turnover and profit results. The company must work on (retail) profit maximization in combination with risk minimization. This way a company can run optimally. It is up to the leader to manage managers and organizational units so effectively, so that optimal results can be achieved. The director is responsible for the results achieved, for which he can be rewarded but also held accountable. How this is achieved depends on the way in which the working relationship arose.

How is the statutory director appointed?

This director can be appointed in two ways. These are the following:

  • the appointment is made by a decision of the AGM or the General Meeting of Shareholders. To this end, the most capable person from a group of shareholders is appointed to lead the company, shape it and set a clear course;
  • one is hired on the basis of an employment contract. This means that the remuneration is contractually legally valid, to which employment law applies .

Is the new leader adequate?

The AGM appoints the director to achieve results. To this end, objectives are defined, which must be achieved or exceeded in all reasonableness. This means that a lot is asked of a new director. If someone is newly appointed, everything must be done to make things happen. A new vision in combination with a breath of fresh air can ensure that good profit and business results can be achieved quickly. This often means that new measures must be implemented with great efficiency in order to achieve those requirements and wishes.

Policy settlement

As a director, you will implement a new policy with full courage. This should also lead to a concrete improvement of the organization. If the plans are applied properly, this can lead to satisfactory results. This is different if it turns out in an unfortunate way. In both cases, the policy is settled in the form of a reward or administrative punishment. Although introducing good policy sometimes takes time, efforts will be made to keep things going. However, if a failed policy has been consciously applied or there is improper management, people can be held accountable for this.

New director through change management

If a new statutory director is appointed in combination with management changes, it can be useful to apply change management. This involves implementing business processes in a structured manner to ensure that staff have the capacity to do so. By involving employees in a timely manner in change management, resistance on the work floor can be prevented, with changes being applied quickly and effectively. The result will quickly show itself in a better structured organization with the new statutory director at the head.

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