Directors

-Sec 4 CA’65 – ‘ Any person occupying the position of a director of a company by whatever name he is called

 Types of director

1. Executive Director
Fulltime directors who are also involved in the management of the co. ie performs a specific role in the
management of the co. (usually also an employee of the co under service contract)

2. Non-executive Director ( Re Continental Assurance co of London PLC)

No involvement in daily management i.e no specific function to perform in management. Act as a
member of board & usual involvement is to attend board meetings only. Role has increased in recent
years with the emphasis corporate governance especially for public co’s

3. Alternate Director
The alter ego of someone else, they turn up at the meeting when director unable to do so.
Section 122(1) CA’65- An alternate / substitute will not be considered in the statutory minimum
number of directors.

4. Informal/ De Facto Director

One who act as director though not appointed formally

5. Shadow Director
Director for legal purposes if the BOD are accustomed to act in accordance with their directions &
instructions.
Subject to the same duties as directors

6. Managing Director
One of the directors to carry out all day-to-day management functions.

 Appointment of Directors
Sec 122(1) CA’65
There must be at least 2 directors each whom must have his principal / any place
residence in Malaysia
Section 122(2) CA’65
Must be a natural person of full age
 Disqualification of Directors

 Share Qualification
- Although the companies act doesn’t impose a share
qualification on directors, the AA of the co may so impose.

Section 124 CA’65

- Where the AA require directors to acquire & hold certain

minimum number of shares, the directors must obtain
shares within 2 months of appointment / such shorter
period as is stated in articles
- The directors must vacate office, if he has not obtained
the share qualification within the stipulated period or if
after so obtaining it he ceases at any time to hold his
qualification
- If the director enters into a contract on behalf of the co.
while he is disqualified, the contract nevertheless valid by
virtue of Section 127 CA’65
- Which states that the acts of a manager, director of
secretary will be valid not withstanding any defect that
afterwards be discovered in his appointment or
qualification.
- Dawson v African Consolidated Land and Trading Co