Types of Director

Independent Director ;Member of a company's board of directors who has not been an officer or employee for one year preceding any action on an offer.

Non-working director of a firm who is not an executive director  and, therefore, does not participate in the day-to-day management of the firm. He or she is usually involved in planning and policy making, and is sometimes included to lend prestige to the firm due to his or her standing in the community.Non-executive directors are expected to monitor and challenge the performance of the executive directors and the management, and to take a determined stand in the interests of the firm and its stakeholders. They are generally held equally liable as the executive directors under certain statutory requirements such as tax laws.

Managing Or Wholetime Director, Link With Nature Of Duties, Not Designations Department's Clarification.-Whether a director is to be regarded as a whole-time director or as a managing director of the company would depend on the nature and extent of the duties entrusted to him and that the designation under which the appointment is made would no! make any difference in this regard. Thus, if a director is entrusted with managerial functions, he would be in the position of a Managing Director notwithstanding the fact that he may be designated as a technical.

A Whole-time Director is virtually a Managing Director though not so designated. Whether a director is to be regarded as a Whole-time Director or as a Managing Director of the company would depend on the nature and extent of the duties entrusted to him and the designation under which the appointment is made would not make a difference in this regard. If a director is entrusted with managerial functions he would be in a position of a Managing Director notwithstanding the fact that he may be, for instance, designated as a technical advisor or technical director of the company. One distinction between Managing Director and Whole-time Director is that a Managing Director of a private company which is not the subsidiary of a public company may be a Managing Director of more than one company. However, a Whole-time Director, being a whole time employee, cannot be a Whole-time Director in more than one company.

Under the Companies Act, 1956, the following kinds of directors are recognised: 

Ordinary Directors

Ordinary directors are also referred to as simple directors who attends Board meeting of a company and participate in the matters put before the Board. These directors are neither whole time directors nor managing directors.

Managing Director

Managing Director is a director who, by virtue of an agreement with the company or of a resolution passed by the company in general meeting or by its Board of directors or, by virtue of its Memorandum or Articles of Association, is entrusted with substantial powers of management which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called.

Whole-time/Executive Directors

Whole-time Director or Executive Director includes a director in the whole-time employment of the company.

Additional Directors

Additional Directors are appointed by the Board between the two annual general meetings subject to the provisions of the Articles of Association of a company. Additional directors shall hold office only up to the date of the next annual general meeting of the company. Number of the directors and additional directors together shall not exceed the maximum strength fixed for the Board by the Articles.

Alternate Director

An Alternate Director is a person appointed by the Board if so authorised by the Articles or by a resolution passed by the company in the general meeting to act for a director called "the original director" during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held. Generally, the alternate directors are appointed for a person who is Non-resident Indian or for foreign collaborators of a company.

Professional Directors

Any director possessing professional qualifications and do not have any pecuniary interest in the company are called as "Professional Directors". In big size companies, sometimes the Board appoints professionals of different fields as directors to utilise their expertise in the management of the company.

Nominee Directors

The banks and financial institutions which grant financial assistance to a company generally impose a condition as to appointment of their representative on the Board of the concerned company. These nominated persons are called as nominee directors.