The define of CEO, Managing Director, Executive, Non- Executive & Shareholder

Frequent Asked Questions (FAQ) about the role of a Director: 

1. For each Annual General Meeting (AGM) to be call for:

  1. To call for a meeting, a notice must be given in not less than 14 days or such longer period as provided on the articles;
  2. In the case of a meeting to pass a special resolutions, a notice of 21 days is required.


2. What is CEO/ Managing Director (MD)

The MD is the Chief Executive Officer of the organization where he is appointed by the board and he is an Executive Director. The MD or the appointed Chairman has an extra vote when the board of directors have the same number of votes. The MD can be “removed” by not electing him during the Annual General Meeting (AGM) when he is off by the rotation provided it is written at Articles of Association. The MD is having the utmost power in managing the organization but must NOT make any secret profit out of the position as the MD.

Among the tasks for growing the business:

a. Crafting the vision and direction of the Company;

It’s a straight forward statement that a CEO sets the sights of measurable 3 and 5-10 years plan, driver of business and accountability to manage the company’s progress towards the vision. Start practicing in drafting the Company’s vision and mission by referring to the profit & lost statement in getting the figure.

b. The ultimate responsibility for cash management;

Some of the C-level people will think, it’s a CFO’s job but NO. Managing cash flow it’s the CEO’s ultimate task as cash will determine the health & survival of the business; in short, the CEO needs to sleep, think and breathes the “air” of cash.

c. Placement of “right people at the right jobs at the right time;

The sharp eye of a CEO will need to know who to leave the Company and who to retain for TALENT enhancement; a fast action will be needed to remove those “PARASITES” from the Company as well.

d. Managing key relationship and “own” it;

Enjoy the strength of relationship with the business circle so that help or support is just a phone call away however, it’s not easy to keep them all close. Know and define your key contacts, it’s helps.

e. The never ending learning curve;

Trust that the CEO already completed the market research and diligence about what is happening around the business, competitors are up to and customers’ expectation. Business is constant change now and as a CEO, you will need to evolve and so do your company by attending conferences, talk to experts, social media like LINKEDIN, blogs and engaging “gurus” to get yourself few steps ahead.

f. A cheerleader!

Cheer everyone up by sharing news to your entire team on what is happening and your visions through open and transparent communication. Do not forget that, this is year 2020 where people can read almost everything at Google.


3. The difference between Executive and Non- Executive Director:

a. An Executive Director (shareholding) receives salary who is having full- time working at the organization with authorize of managerial power given by the Board to carry out management of the organization.

Among the responsibilities are:

  1. handling accounts and ensure balance sheet & profit and loss are made out during the financial year;
  2. ensure Directors’ reports be written for each financial year;
  3. execute honestly, take reasonable care and diligence in executing power;
  4. be ready to answer the shareholders during AGM/ EGM.

b. Non Executive Director (commonly known as Sleeping Director) is a director who does NOT having full time capacity with the organization and receive a smaller director’s fees at year end. The function of the non- executive director is to define the overall policy of the organization and he will need to attend AGM or Extraordinary General Meeting (EGM) if there is a need.


4. The Shareholders (Ordinary Shareholders):

The ordinary shareholders has the interest towards the organization and the rights are:

  1. to attend, speak and vote at the general meetings;
  2. to place notes on the general meeting agenda which is prepared by the Secretary;
  3. to request the organization to have a EGM (not less than 5% shareholding) if there is a substantial need;
  4. to appoint up to 2 proxies (representatives) if the shareholder unable to attend the general meeting;
  5. the shareholder (Sdn. Bhd./ Berhad) may appoint its Corporate Representative to the AGM/ EGM.

5. Shadow Director:

i. the Director is not being appointed formally but the Director is usually controlling/ managing from behind.

ii. The instructions given will be executed by the Board of Directors but nevertheless, the Shadow Director is unable to execute any signatories or whatsoever. 

6. De-Factor Director:

i. A De-Factor Director is acknowledged by the Court which is being assume in acting as a Director although not being validly appointed by the Board of Members.

7. Nominee Director:

i. Nominee Director is by appointed by group of people who are having interest in the Company. 

ii. It is a norm for parent-subsidiary companies in appointing Nominee Director in representing their concern on behalf in the subsidiary Company.


The article is written for general reference purpose and do connect with your COSEC for further information.


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