(ii) The terms managing director and chief executive are now used interchangeably. The new model articles of association makes no reference to either title, but the UK Corporate Governance Code only refers to the title chief executive, so that appears to be the current preferred term for the person who oversees the day-to-day operation of the company (cf Hely- Hutchinson v Brayhead Ltd (1968)).
Under Article 5 of the model articles, the board of directors may delegate any of the powers, which are conferred on them under the articles, to such person or committee as they think fit and any such act of delegation may authorise further delegation of the directors’ powers by any person to whom they are delegated. In this way, the board may appoint one or more managing directors or chief executives who will have the authority to exercise all the powers of the company and to further delegate those powers as they see fit. Article 5 also makes provision for the board of directors to revoke any delegation in whole or part, or alter the terms and conditions under which it may be operated.
In the case of a chief executive/managing director the mere fact of appointment, however, will mean that the person so appointed will have the implied authority to bind the company in the same way as the board, whose delegate they are. Outsiders, therefore, can safely assume that a person appointed as managing director has all the powers usually exercised by a person acting as a managing director. |
