An Alternate Director is a person who is appointed to act as a director, as a substitute for an existing director, for a specified period. An Alternate Director generally would have the same powers as a director. However, their powers and duties can vary depending on the terms of their appointment.
How to appoint an Alternate Director
Some companies have rules governing the appointment of an Alternate Director in its Constitution.
With the other directors’ approval, a director may appoint an Alternate Director to exercise some or all of their powers for specified period .The consent of the Alternate Director should be obtained in writing before they are appointed.
The personal details
- the personal details of the person who is appointed as the Alternate Director; and
- the terms of their appointment, including when the Alternate Director is to act as a director.
- their full name;
4.any former names;
05.date and place of birth; and
06.their address.
Powers of an Alternate Director
Section 201K(3) of the Act provides that when an Alternate Director exercises the director’s powers, it is just as effective as if the powers were exercised by the director themselves.
The terms of the Alternate Director’s appointment should be clear and specify the duties and conditions of what they are empowered or entitled to do. Some examples of what an Alternate Director may be appointed to do include:
- attending board meetings;
- receiving notices or documents;
- power to vote; and
- Sign documents on behalf of the company.
The terms should also be clear on any restrictions the company imposes on the Alternate Director.
Duration of appointment
The length of an Alternate Director’s appointment will depend on the terms of their appointment. The duration of the appointment does not need to be specified for the appointment to be valid.
When the appointment is terminated, the termination must be in writing and a copy needs to be given to the company.