6 Director Types in Malaysia
6 Director Types in Malaysia
- Executive Director - A person who works full-time for the company and manages its day-to-day operations.
- Non-Executive Director - A person who does not work full-time for the company but oversees the management, participates in board decisions, and votes.
- Nominee Director - A person appointed based on their status as an employee of the company, or appointed or represented by shareholders, employers, or bondholders.
- De facto Director - A person who holds a position in the company that is not officially designated as director, but exercises rights within the scope of directorial authority.
- Shadow Director - Someone who is not a director but has the ability to control the board of directors and the company. If they actually direct, they should assume directorial responsibilities.
- Alternate Director - A person selected to temporarily replace a company director in carrying out their duties, and can only be nominated as an alternate director if permitted by the articles.
Common accounting issue: Who can be appointed as a director?
~A person who is 18 years old or older.
~Of sound mind.
~Usually resides in Malaysia.
~Not an undischarged bankrupt.
~Not under any legal constraints.
~Not the company's auditor.
~The company's articles do not prohibit them from becoming a director.
~Most do not require specific academic or professional qualifications.
~Not sentenced to imprisonment for the past five years for the above crimes.
~Not convicted in Malaysia or abroad for any of the following crimes:
i.Offenses related to promoting, forming, or managing a company
ii.Bribery, fraud, or dishonesty offenses
iii.Offenses under sections 213, 217, 218, 228, or 539
Common accounting issue: Legal responsibilities of directors in Malaysia
Regardless of the type of directorship, the Companies Act holds all directors accountable for their responsibilities.
Feb 27,2024