Responsibilities of the director of a public limited company
The responsibilities of the director of a public limited company are one of the criteria to be taken into account before opting for this administrative form. In the following, we will analyse their implications in various circumstances.
The foundations of a public limited company
A public limited company (S.A.) is a form of business organisation in which the share capital is divided into shares and the ownership of the company is represented by these shares. The shareholders, who are the owners of the shares, have limited liability, which means that their liability for the debts and obligations of the company is limited to the total of their investment in the shares.
Corporations are legal entities independent of their shareholders and can conduct business, hire employees, own property and be sued or sue in their own name. Shares can be bought and sold freely, which facilitates the transfer of ownership and provides liquidity to investors.
The company is managed by a board of directors, elected by the shareholders, which makes strategic decisions and oversees the day-to-day operation of the company.
Responsibilities of the director of a public limited company
The director of a public limited company plays a crucial role in the management and direction of the company. His or her responsibilities cover a number of key areas, which ensure the smooth running of the company in all its operations.
Operational management
The director is responsible for the day-to-day operational management of the public limited company. This includes overseeing all business activities, coordinating departments, ensuring that resources are used efficiently and that operations are aligned with the company’s strategic objectives. He or she must make effective decisions to maintain business continuity and improve business performance.
Legal and regulatory compliance
The manager must ensure that the company complies with all applicable laws and regulations, including timely financial and tax reporting, compliance with labour and environmental regulations, and adherence to corporate laws. Failure to comply with these obligations can result in legal penalties and fines, as well as damage to the company’s reputation.
Protecting shareholders’ interests
Protecting the interests of shareholders is a fundamental responsibility of the director. He or she must act in the best interests of shareholders, ensuring transparent and ethical management, through full and accurate disclosure of financial and operational information, making decisions that maximise shareholder value and preventing conflicts of interest.
Financial Oversight
Financial oversight is one of the critical areas. The manager must ensure the integrity of financial statements, implement effective internal controls and oversee budget management. He or she is also responsible for the allocation of financial resources, investment management and must ensure the profitability of the company.
Relationship to the board of directors
The manager must maintain constant and effective communication with the board of directors. He must provide detailed reports on the company’s performance, raise problems and propose solutions. It is also important that he/she complies with the decisions of the board and ensures that approved policies and strategies are properly implemented.
Risk management
The manager should identify, assess and manage risks that could affect the company, such as financial, operational, market and legal risks. He or she should develop and implement risk mitigation strategies and ensure that the company is prepared to deal with contingencies and maintain business continuity.
The liability of the manager of an SA in the event of bankruptcy
The manager of a public limited company has specific responsibilities if the company faces bankruptcy. He or she must act diligently and with the interests of creditors and shareholders in mind, ensuring that all decisions taken minimise losses and protect the company’s remaining assets.
The administrator must ensure that the company complies with all legal obligations related to the bankruptcy process, including timely filing of insolvency applications, cooperation with judicial authorities and transparency in the disclosure of the company’s financial situation. Failure to comply with these obligations may result in legal and personal sanctions.
In addition, the trustee is responsible for preserving and managing the company’s assets during the bankruptcy process. This involves taking steps to prevent the dilapidation of assets and ensuring that any sale or liquidation of assets is conducted in a fair and transparent manner. It should also work closely with the liquidators or insolvency administrators to manage the process in an orderly manner.
If it is proven that the administrator acted negligently, in bad faith, or committed fraud that contributed to the bankruptcy, he or she may be held personally liable for the company’s debts.
Is a director liable with his assets in a public limited company?
A director of a public limited company is not liable with his personal assets for the debts of the company, unless he acted negligently, in bad faith or committed fraud, in which case he may be held personally liable.
