Responsibilities of a Company Director


Generally, the board of directors of a company is primarily responsible for:

  • Determining the company’s strategic objectives and policies
  • Monitoring progress towards achieving the objectives and policies
  • Accounting for the company’s activities to relevant parties, e.g. shareholders


A director can be an employee of the company who is responsible for managing the day-to-day affairs of a company.

According to the Malaysian Companies Act 2016, all private companies are required to have at least one director who is a natural person of at least 18 years old and ordinarily reside in Malaysia by having a principal place of residence in Malaysia.


Who is qualified to be a director?

In order to be a director in Malaysia, you need to be:

  1. At least 18 years old
  2. A natural person
  3. Of sound mind
  4. Locally reside in malaysia


You will be disqualified to be a director, if you are:

  1. An undischarged bankrupt
  2. A person convicted for offences relating to the promotion, formation or management of a corporation
  3. A person involved in offences such as bribery, fraud, dishonesty, breach of duties of directors within or outside Malaysia


Can a foreigner/non-locals be a director?

As long as you have at least one local resident director, there is no restrictions to have foreigners/non-locals as other directors of the company.


Duties and Responsibilities of A Company Director

Directors have fiduciary duties towards the company and their shareholders who appointed them. Fiduciary duties include:-

  • Act bona fide in the interest for the company. Bona fide means “in good faith”;
  • Avoid a situation where there is a conflict between duty to the company and personal interest; and
  • Not to make any secret profit out of the position as director.

News from SSM: A director was found guilty because he failed to carry out his fiduciary duties. For full text read here


The statutory duties of the directors include:-

  • Act honestly at all times and use reasonable diligence when discharging their duties;
  • Avoid improper use of information obtained by virtue of position to gain personal advantage personally or to cause detriment to the company;
  • Avoid improper use of sensitive, unpublished information to gain personal benefits;
  • Before disposing of or executing any transaction for the disposal of a substantial portion of the company’s undertaking or property, obtain approval from the members in a general meeting;
  • Disclose his shareholdings in the company and any changes thereof;
  • Disclose his interest in any contract or proposed contract made by the company; and
  • Ensure registers and statutory books are kept updated.


The directors’ responsibilities include ensuring the following requirements of the Companies Act, 2016 are complied with:-

  • Record minutes of all directors’ meetings;
  • Make annual return and lodge with SSM;
  • Keep proper accounting records;
  • Table accounts, balance sheet and directors’ report at AGM;
  • Circulation audited accounts to members;
  • Appoint auditors;
  • Comply with restriction, limitation or prohibition of a private limited company;
  • Appoint company secretary;
  • Make declaration of solvency in the case of voluntary winding up by members;
  • Ensure that dividend payments are from profits only.


Appointment of Director

A person becomes a director either at the point of incorporation or after the company has been formed. Your company secretary will prepare the director’s consent to act as director form for you to sign, while the other directors in the company to sign the board resolution approving your appointment which is then filed with CCM. Thereafter, your company secretary will update the company’s registers with your details.


Resigning as a director

Before you tender your resignation letter, you have to first make sure that there is at least another one local resident director in the company. If there’s one, then you may proceed to inform your company secretary who will usually prepare your resignation letter and a board resolution for all the other directors to sign and file the changes with CCM. Thereafter, your company secretary will update the company’s registers accordingly.


Need help?

We can provide a local nominee director service if you need our help to meet your statutory requirements of a resident director. Contact us to find out more. Alternatively, you may send us your message/questions below and we will get in touch with you…

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