The decisions made within a company are either the responsibility of the Directors or the shareholders as the case may be. The shareholders make decisions as the company owners, while the directors make decisions as the managers of the company.

Directors Decisions Directors make decisions about the day to day running of a company. A lot of the decisions affecting the company may be taken by a decision of the board of directors alone.

Directors make decisions through board resolutions. These resolutions are written documentations of decisions reached by the directors regarding the affairs of the company.

The decisions of the board of directors are usually made by votes at board meetings. Once a vote is taken and a decision made regarding the company, it is documented as a resolution and signed by two directors or a director and secretary. However, in practice, not all decisions of the board regarding the company are documented as resolutions.

There are specific decisions that must be documented as resolutions for them to be effective such as decisions which have to be filed at the Corporate Affairs Commission and other regulatory bodies and decisions that have to be filed or processed at third party businesses such as banks.

Although resolutions are to be passed at board meetings, in practice, most resolutions are made outside of board meetings. This is because the law provides that a written resolution signed by two directors of the company will be held valid and effective as though that resolution was passed at a duly held board meeting.

From all of the above, we can see that decisions of directors can be made either by;

  1. A written resolution signed by atleast two directors
  2. Calling a Board meeting (and passing a resolution thereof)

The rules regarding director’s decision making are usually found primarily in the articles of associations and include the provisions and guidelines for meetings and voting