Company directors are legally responsible for managing and running the day-to-day business of the company and can be personally liable for a company's actions. Normally company directors have been formally appointed by a set legal process and are listed on the UK Companies Register. The process will be contained in the company's articles of association for appointing and removing directors. For further information, read Appointing and removing directors.
Directors of a company have legal fiduciary obligations and duties to the company and the shareholders. Some of the common duties include acting in the best interests of the company, acting within the powers given to them by the articles of association and declaring any conflicts of interest or personal interest in proposed transactions. Failure to fulfil these obligations can result in disqualifications as a director, financial penalties and even criminal sanctions for wrongful or fraudulent trading. For further information, read Directors' duties.
You may also wish to appoint a non-executive director with a Letter of appointment. Non-executive directors carry the same duties and obligations as regular directors. However, the distinction between executive and non-executive directors is that non-executive directors usually don't deal with the day-to-day operation of the company. Instead, they contribute by providing expertise and help scrutinise the performance of the business and give strategic advice and support to the executive directors. Non-executive directors can be a very useful addition to start-up boards by providing valuable, independent advice.