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Powers of Directors - Coggle Diagram
Powers of Directors
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Powers to delegate
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Executives are usually allowed to sub-delegate their powers to other people in the organisation - this does not necessarily happen by a literal chain of delegation down to the most junior employee
Most boards use a combination of formal delegation (eg to executive directors)and the adoption of a company wide policies and procedures which set authority limits for the various tiers of management
Special powers
Invariably, articles also give the directors various special powers that they would not otherwise have under the general management clause
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If a decision that directors are proposing to make does not feel like a management decision and there are no special powers authorising them to make that decision, shareholder approval may be required
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In the UK the directors derive their powers from the company's articles rather than anything in legislation
Although CA2006 requires every company to have at least one director (or two for public companies), it does not really confer any management powers on them
CA2006 deliberately leaves the division of powers between the shareholders and the directors to be determined in the company's articles of association
Articles delegate wide powers to the directors, if they did not do so, almost all decisions would have to be taken by a majority vote of the shareholders, either by written resolution or at a general meeting - this would be impractical for most purposes even in a small owner-managed company, let alone a listed company with thousands of shareholders