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'Director' Job Title

Rachel Hall

Hi everyone

I have been asked about the potential implications of giving someone the job title 'Sales Director' without actually making them a Company Director. The belief is that the job title will assist this person in gaining new business and add a level of seniority to external clients. 

Is anyone aware of whether this comes with any risks at all? Could it be assumed that the job title implies they are a Company Director and therefore have the same accountabilities? 

Thanks

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  • Hi Rachel

    I think you may be worrying that using the title "director" could make someone a de facto director.

    A de facto director, as opposed to a de jure director, is someone who has acquired the legal status of company director with all the responsibilities and personal liability even though they are not registered at Companies House as a company director because in fact they wield the same authority as a de jure (or by law) director.

    So a director is as a director does. Plenty of people have a director title without acquiring the accountabilities of a de jure director.
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  • Hi Rachel

    I think you may be worrying that using the title "director" could make someone a de facto director.

    A de facto director, as opposed to a de jure director, is someone who has acquired the legal status of company director with all the responsibilities and personal liability even though they are not registered at Companies House as a company director because in fact they wield the same authority as a de jure (or by law) director.

    So a director is as a director does. Plenty of people have a director title without acquiring the accountabilities of a de jure director.
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  • in reply to Elizabeth Divver
    Think it's most unwise to the point of folly for many reasons for a company to allow someone to be called (especially) 'Sales Director' if they're not a legally registered board director of the company.

    For that reason, many companies use either 'Director of.....' or Associate Director' as job titles. See eg

    simply-docs.co.uk/.../Letter-Appointing-Associate-Director
  • in reply to David
    Davud it’s now very very common to use X Director rather than the more tradition Director of....

    Would say there are probably thousands ( if not more) X Director roles who have no official Director legal responsibility. It’s something that used to be observed but no longer.
  • in reply to Keith
    Some apparently well-informed commentary from 2009, Keith:

    "......The two major issues with using the job title "Director" for someone who is not a registered director are:

    The issue for employees is that an employee who is not an actual registered company director may be treated and held to account in the same manner as an actual director (but may not benefit from the same insurance policies put in place to protect the actual directors); and

    The issue for company is that they may find themselves bound by the actions of an employee exercising the rights that normal directors have even though they are not an actual registered director. It is not sufficient for a company to try and wash its hands of the act of an employee who they have given the job title "director" as the company have facilitated this and effectively held that person out as having the additional rights and responsibilities of being a registered company director....."


    Source: www.linkedin.com/.../
  • in reply to Keith
    Definitely the way, especially in sales roles. When dealing with clients it can often be easier to get your foot in the door with them if you have Director in your job title.