Resolution to approve appointment of managing director

Resolution to approve appointment of managing director

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This document is a resolution to approve the appointment of a managing director.

Directors and officers

A director is a person who is appointed to the position of director. This can include the following:

  • appointed directors;
  • governing directors;
  • nominee directors;
  • alternate directors;
  • associate directors;
  • de facto directors and shadow directors; and
  • executive, non-executive and independent directors, including managing directors and chairmen.

Generally, the process for appointing directors is governed by the company's constitution. The constitution may give the general meeting power to appoint directors, and may also confer power on the directors to fill casual vacancies and appoint additional directors. A public company must have at least three directors (not counting alternates). A proprietary company must have at least one director.

Appointment of managing directors

A managing director’s appointment to the board of directors must be passed as a resolution of the directors of the company. See replaceable rule section 201J of the Corporations Act 2001 (Cth) (Act).

If there is no formal agreement to be entered into, the directors should make the appointment on certain specified terms (subject to further determination). These terms should deal with:

  • duration of the appointment;
  • amount and frequency of payment of salary;
  • holiday and sick leave entitlements;
  • powers and rights of the managing director in that capacity;
  • obligations (such as in relation to non-competition and confidential information); and
  • special benefits (such as company car, telephone and travel entitlements).

Execution

A company is not required to have a company seal (see section 123(1) of the Act). If the company has no common seal or does not wish to use it, the appropriate methods of execution of an agreement are those set out in section 127 of the Act.

Related document

Agreement of appointment of managing director

This document has been updated for Lexis Nexis by Jane Garber-Rosenzweig, Partner, Gable Lawyer. Previous versions of this were authored by Kate Mills, Peter Richard, Robert D Jeremy, Robert M A Mangioni, Kathleen H Clothier and Amanda Beattie.

This document is prepared with the assistance of Specialist Editors Karen Lee and Geoff Geha.