Empowers directors - company management, Business Law and Ethics

Empowers directors - company management:

In the case of companies which have adopted Table A, Article 107 empowers directors to appoint a managing director "for such period and on such terms as they think fit". Therefore in Craven-Ellis v Cannons Ltd it was explained that the words "the directors" at the beginning of Article 107 means "the de jure directors". Consequently, a purported appointment by de facto directors would be null and void. A managing director occupies a crucial position in the management of a company and as such it would be improper to allow people who are in fact illegally in office (the de facto directors) to appoint him. This decision is not inconsistent with s.2 of the Act which defines "director" as including a de facto director because the section provides that the definition will apply "except where the context otherwise requires".

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