1. Introduction

Being appointed as a company director is both an honour and a serious responsibility. Under the Zimbabwe Companies and Other Business Entities Act (Chapter 24:31), directors are legally recognized as the stewards of a company — entrusted to make strategic decisions, protect shareholders’ interests, and ensure compliance with laws and regulations.

Understanding your legal and ethical duties as a director is essential to protect yourself from liability and to maintain the integrity of your business operations.

2. Who Is Considered a Director?

A director is any person appointed to the board of a company to manage its affairs and make decisions on its behalf. The Act recognizes:

  • Executive directors — involved in day-to-day management and operations.
  • Non-executive directors — provide oversight and independent judgment.
  • Alternate directors — stand in for other directors when necessary.

All directors, regardless of title, share collective responsibility for ensuring that the company complies with legal, financial, and ethical standards.

3. Core Duties of a Director

The Companies Act defines several key duties every director must uphold. These duties form the foundation of responsible and transparent corporate governance.

a. Fiduciary Duty

Directors must act in good faith and in the best interests of the company. This means prioritizing the company’s success above personal gain or external influences. A breach of fiduciary duty can lead to personal liability or disqualification.

b. Duty of Care, Skill, and Diligence

Directors must exercise reasonable care and use the skills expected of someone in their position. They are required to make informed decisions, review company reports, and ask critical questions about business performance.

c. Duty to Avoid Conflicts of Interest

A director must avoid situations where personal interests may conflict with the company’s interests. For example, engaging in a business deal with a competitor or using company information for personal benefit violates this duty.

d. Duty to Act Within Powers

Directors must operate within the powers granted to them by the company’s memorandum and articles of association. Acting outside these powers may invalidate company decisions and expose directors to legal risks.

e. Duty to Maintain Company Records

Every director has a responsibility to ensure the company keeps proper books of accounts, shareholder registers, and statutory records. Failing to maintain these records can lead to penalties and potential deregistration.

4. Financial Responsibilities and Compliance

Directors are accountable for overseeing the financial health of the company. They must ensure:

  • Accurate financial reporting — Financial statements must reflect the company’s true position.
  • Timely submission of annual returns — Companies must file annual returns and other statutory documents with the Registrar.
  • Compliance with tax laws — Directors must ensure that all taxes are properly calculated and remitted to ZIMRA.
  • Internal control systems — Strong financial management systems should be implemented to prevent fraud or mismanagement.

Neglecting these responsibilities can result in heavy fines, disqualification, or even imprisonment in cases of willful misconduct.

5. Collective Responsibility and Board Decisions

All directors share collective responsibility for decisions made by the board. This means that even if a single director objects to a decision but does not formally record that objection, they may still be held liable for the outcome.

Therefore, directors must ensure that:

  • Board meetings are properly minuted.
  • Resolutions are clearly documented.
  • Decisions are made transparently and with informed consent.

Proper documentation protects directors from future disputes or liability claims.

6. Ethical and Governance Expectations

The Companies Act emphasizes ethical leadership and corporate governance. Directors are expected to promote:

  • Transparency in company operations.
  • Accountability in decision-making.
  • Fairness to shareholders, employees, and stakeholders.
  • Sustainability in business practices.

Good governance is not just a legal requirement — it is a key driver of business success and investor confidence.

7. Personal Liability of Directors

While the company is a separate legal entity, directors can still be held personally liable for certain actions, including:

  • Fraudulent or reckless trading.
  • Failure to disclose conflicts of interest.
  • Misuse of company funds or assets.
  • Authorizing illegal payments or dividends.
  • Non-compliance with statutory requirements.

In severe cases, directors may face disqualification, fines, or criminal prosecution. Therefore, directors must always act prudently and seek professional advice when in doubt.

8. Resignation and Removal of Directors

A director may resign by giving written notice to the company, but the resignation must be properly recorded and lodged with the Registrar of Companies.

On the other hand, a director can be removed by:

  • A resolution of shareholders, or
  • Regulatory action, in cases of misconduct or incapacity.

Even after resignation, directors can still be held accountable for actions taken during their tenure.

9. The Role of the Company Secretary

The Act also highlights the importance of the company secretary, who works closely with the board to ensure compliance. While directors are ultimately responsible for governance, the company secretary provides administrative support and ensures statutory filings are completed on time.

10. Best Practices for Directors

To effectively fulfill their duties, directors should:

  • Attend all board meetings and participate actively.
  • Keep up-to-date with changes in company law and governance practices.
  • Disclose all potential conflicts of interest.
  • Review financial statements and audit reports regularly.
  • Ensure the company has a sound risk management policy.
  • Maintain professional conduct in all business dealings.

By doing so, directors not only protect themselves legally but also enhance the credibility and performance of their organizations.

11. Importance of Continuous Education

The Companies Act encourages directors to engage in continuous professional development. Workshops, corporate governance courses, and financial management training can strengthen directors’ understanding of their obligations and help them adapt to changing regulatory landscapes.

12. Conclusion

Being a director is more than a title — it is a position of trust and responsibility. Under the Zimbabwe Companies and Other Business Entities Act, directors are expected to act with integrity, diligence, and transparency.

Failure to comply can result in serious legal and financial consequences, while adherence promotes business sustainability and investor confidence.

By understanding and fulfilling their duties, directors not only safeguard their companies but also contribute to a stronger, more ethical corporate culture in Zimbabwe.