Done properly it is one of the few mechanisms a board has for examining its own performance, and it usually surfaces two or three things everybody privately knew and nobody had said. This article covers when to do it, who should run it, and what a useful evaluation actually produces.

What the Code expects

The UK Corporate Governance Code provides that the board should undertake a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. For FTSE 350 companies the Code expects that evaluation to be externally facilitated at least every three years, with the annual report explaining the process and any connection between the external evaluator and the company.

The Code applies on a comply-or-explain basis to premium-listed companies. Private and investor-backed boards are not bound by it — but its provisions have become the reference point for what good practice looks like, and investors increasingly expect something equivalent. Further background is published by the ICAEW.

One provision worth noting: the Chair should act on the results, and where an individual director’s contribution is found wanting, the Chair should address it. Evaluations that produce no consequence are the reason the exercise has the reputation it does.

When to do it

Annually as routine, and specifically at four moments.

Before appointing a new Chair or several new directors. An evaluation run before a refresh tells you what the board is missing, rather than confirming afterwards that you hired for what you already had. This is the highest-value timing and the least used.

After a significant failure. A missed forecast the board did not see coming, a governance incident, a strategy that unravelled. The temptation is to review the executive; the more useful question is what the board itself did not ask.

Ahead of investment or sale. Sophisticated investors assess boards. Evidence of a board that examines its own performance is a positive signal, and the process usually improves what is being assessed.

When the board has changed character. Founders stepping back, investor directors joining, a first independent non-executive. The board that exists is not the board the current practices were designed for.

Internal or externally facilitated?

The case for external facilitation is not sophistication of method. It is that directors will say things to an outsider under confidentiality that they will not say in a room chaired by the person they would be criticising. That is the whole value, and it is why the Chair’s own evaluation should always be led by someone other than the Chair — normally the Senior Independent Director.

What to actually examine

Questionnaires about whether the board has the right skills produce answers everybody can agree with. Five areas produce more useful discomfort.

What the board did not discuss. Review twelve months of agendas against the risk register and the strategy. Items that never appeared are more revealing than items that did.

Where decisions actually get made. If material decisions are settled before the meeting and ratified in it, the board is not governing. Directors know when this is happening.

Whether dissent occurs. A board with no recorded disagreement in a year is not a board that agrees; it is a board that does not challenge. The minutes are evidence here.

Whether papers support decisions. Volume is not quality. Ask directors what they actually read and what they would drop.

Individual contribution. The uncomfortable one, and the reason external facilitation exists. Attendance, preparation, whether a director’s expertise is being used, and whether anyone has stopped contributing.

Turning findings into action

An evaluation is worth what it changes. Four outputs are worth insisting on.

A short list of agreed actions with owners and dates. Three or four, not fifteen. Reviewed at the next board meeting and the one after.

Any composition implications, stated. If the board lacks a capability, that becomes a recruitment brief. If a director is no longer contributing, that is a conversation the Chair owns — and our board construction guide covers how to specify what is missing.

Changes to the agenda and the pack. Usually the quickest win available and the one most often identified.

Individual feedback, delivered. The Chair should speak to each director individually. Feedback aggregated into a report and never said to anyone is not feedback. The Institute of Directors publishes material on director effectiveness that is useful preparation for those conversations.

Frequently asked questions

How often should a board be evaluated?

Annually. The UK Corporate Governance Code expects a formal and rigorous annual evaluation of the board, its committees and individual directors, with external facilitation at least every three years for FTSE 350 companies.

Do private companies need to do this?

There is no obligation, but boards with independent directors or external investors increasingly do it, and investors take it as a positive signal. The practice is more valuable than the compliance, particularly where the board’s composition has recently changed.

Who evaluates the Chair?

The Senior Independent Director, taking views from the other directors. A Chair leading their own evaluation produces predictable results, which is why the Code separates it.

Is external facilitation worth the cost?

Periodically, yes. The value is not technique but candour — directors will tell an independent third party under confidentiality what they will not say in a room chaired by the person concerned. Alternating internal and external across a three-year cycle is the common pattern.

What should an evaluation produce?

Three or four agreed actions with owners and dates, any composition implications stated plainly, changes to the agenda and board pack, and individual feedback delivered by the Chair in person. A report with no consequence teaches the board that the exercise is theatre.

This article covers what the Company Secretary actually does through a sale or acquisition, what buyers look for, and what to fix before a process begins rather than during one.

Before the process: the record

The single most valuable contribution is made twelve months before anyone opens a data room. Five things should be reconciled.

The statutory registers against reality. Members, directors, secretaries, charges and persons with significant control. In businesses that have issued shares to employees, brought in investors or restructured, these frequently diverge from what people believe.

Filing history at Companies House. Late filings, missing confirmation statements, allotments never registered, charges not satisfied on the register long after repayment. Each is small; collectively they signal an organisation that does not attend to detail.

Share history. Every issue, transfer and buyback, with board and shareholder authority documented for each. This is where transactions most often stall — a buyer cannot verify who owns what if the paper trail is incomplete.

Option and incentive schemes. Grant documentation, exercise conditions, valuations and whether the scheme rules were followed. Employee schemes are a common source of unpleasant surprises.

Board minutes. Companies must keep records of directors’ meetings and retain them for ten years under section 248 of the Companies Act 2006. Buyers read them, and they read them looking for decisions that were taken but never recorded.

What buyers actually look for

None of these individually kills a deal. What they do collectively is shift the buyer’s assessment of risk, and risk is priced. A seller whose record is in order negotiates from a stronger position simply because there is less to argue about.

During the process

Once a transaction is live the Company Secretary’s role changes character, and three responsibilities dominate.

The data room. Assembling corporate documents, verifying they are complete and current, and managing what is disclosed and when. Disclosure has legal consequences — what is properly disclosed qualifies the warranties — so this is not an administrative task delegated downward.

Board process under pressure. Transactions generate frequent decisions on compressed timetables, often between scheduled meetings. Written resolutions, short-notice meetings, quorum where directors are conflicted, and a record that will be scrutinised later. Getting this right while everyone is moving quickly is the core of the job.

Conflicts. Management participating in a buyout, directors with shareholdings on different terms, a non-executive connected to the buyer. Each needs declaring, recording, and in some cases the director excluding themselves from the decision. The Company Secretary is usually the only person whose job it is to raise this.

Completion and afterwards

The work does not end at signing. Completion generates a substantial governance workload: share transfers registered, stock transfer forms stamped, registers updated, director appointments and resignations filed, charges registered or released, and the registered office or accounting reference date changed where the acquirer requires it.

Where a group is acquiring, the target’s board needs reconstituting, its articles may need replacing, and its governance framework aligning with the group’s. This post-completion phase is routinely under-resourced because everyone involved is exhausted, and it is where filings get missed.

Do you need someone in post, or support?

Three practical options for a business heading toward a transaction without an established company secretarial function.

Corporate finance advisers and lawyers. They will run the transaction, and their teams will handle much of the documentation. What they will not do is know your history, or have been in the board meetings that produced the decisions now being examined. Their time is also considerably more expensive per hour.

A fractional company secretary. Frequently the right answer for a business twelve to eighteen months out. Someone experienced attending board meetings a few days a month, tidying the record, and present through the process — at a fraction of a permanent appointment.

A permanent appointment. Justified where the business will remain independent with an active board, or where the transaction is the start of an acquisition strategy rather than an exit. Our guide on how to hire a Company Secretary covers the process, and the outsourced versus in-house comparison sets out where each model fits.

One point on timing: do not change company secretarial arrangements during a live process. Switch a year ahead, or wait until after completion.

Frequently asked questions

What does a Company Secretary do in a sale process?

Prepares and verifies the corporate documents for the data room, manages board process and minutes through a compressed timetable, handles conflicts and declarations of interest, and completes the filings and register updates that follow completion.

How far ahead should a company prepare its statutory record?

Twelve months where possible. Reconciling registers, filing history, share transactions, option schemes and board minutes takes time, and doing it under transaction pressure with lawyers billing is considerably more expensive.

What governance problems most often affect deal value?

Incomplete share transaction history, decisions taken without recorded authority, option schemes not operated in accordance with their rules, and undeclared conflicts. Individually manageable; collectively they raise the buyer’s assessment of risk, which is priced.

Can our lawyers handle this instead?

They will run the transaction and produce the documentation. What they cannot do is know the company’s history or have been present for the decisions now under examination. Most sellers use both, with the Company Secretary handling the corporate record and the lawyers the deal.

What happens to the Company Secretary after completion?

In a trade sale into a group, the target’s governance is usually absorbed and the role may not continue. In a private equity transaction the requirement typically increases, because investor directors bring reporting obligations and consent matters that need administering properly.

The confusion is understandable, because in a great many UK mid-market businesses one person does both and the title chosen reflects preference rather than scope. This article sets out where the line actually falls, when a business should move from one to the other, and how both differ from a CTO.

What each role owns

The IT Director owns the estate the business runs on. Networks, servers or cloud infrastructure, end-user devices, core applications, the service desk, licensing, vendor management and security operations. Accountability is for availability, performance, cost and risk — the systems work, they are protected, and they cost what they were budgeted to cost.

The CIO owns the relationship between technology and the business strategy. Which capabilities to build or buy, where technology creates commercial advantage rather than merely enabling operations, how data is used, and what the technology estate should look like in three years rather than what it looks like now. The IT estate typically sits beneath them.

Put plainly: an IT Director is judged on whether things break. A CIO is judged on whether the business is doing the right things with technology, which is a considerably harder thing to measure and a considerably easier thing to get wrong.

Side-by-side comparison

Where the CTO fits

A third title that overlaps both and confuses many briefs. The clean distinction is inward versus outward.

A CTO owns the technology the business builds and sells — the product. A CIO owns the technology the business runs on — the enterprise estate. In a software company both exist and are quite separate roles. In a manufacturer, a retailer or a professional services firm there is usually no product technology at all, and what the business calls a CTO is functionally a CIO.

The practical test when writing a brief: does your technology generate revenue directly, or enable the business to generate it? Product means CTO. Enablement means CIO or IT Director. Getting this wrong attracts an entirely different candidate pool from the one you need.

When to move from one to the other

Most businesses appoint an IT Director first and consider a CIO later. Four signals suggest the move is due.

Technology decisions are being made by people who cannot evaluate them. When a Finance Director is approving a platform choice because nobody senior enough owns technology strategy, the business is carrying a risk it cannot see.

Data has become an asset rather than a byproduct. Once the business wants to use its data commercially — pricing, customer insight, automation — that requires strategic ownership rather than operational maintenance.

The board is asking questions the IT function cannot answer. Cyber exposure, AI adoption, the case for a major system replacement. These need translating into commercial terms, and that is a different capability from running an estate well.

A significant transformation is coming. An ERP replacement, a post-acquisition integration or a shift in operating model. Programmes of that size need someone who can hold the business case, not just deliver the technology — and in some cases a dedicated Digital Transformation Director alongside.

Assessment: separating the two at interview

Candidates frequently present for both, and CVs at this level are written to keep options open. Four questions separate them.

“Describe an investment case you took to a board. What did they push back on?” — the CIO question. Look for commercial framing and evidence they have been challenged and held their position.

“Talk me through your last major incident. What changed afterwards?” — the IT Director question. Detail here is hard to invent, and the change afterwards distinguishes people who learned from people who recovered.

“What did you decommission?” — revealing for both. Estates accumulate. Someone who has never retired a system has been adding rather than managing.

“Explain a technology risk to me as though I were a non-technical director.” — decisive for a CIO. If technical exposure cannot be translated into commercial consequence, the board will never fund the fix. Professional standards for technology leadership are published by BCS, The Chartered Institute for IT.

Two things that apply to both

Data protection accountability. Whichever title is used, someone must own the organisation’s data protection posture, and the board should know who. The Information Commissioner’s Office sets the expectations, and a technology leader who treats this as a legal department matter is leaving a gap.

Statutory status. Many people carrying “Director” in a technology job title are not registered company directors. Where the appointee is formally appointed and filed, they carry statutory duties including the obligation at section 172 of the Companies Act 2006 and personal exposure. Confirm the position at appointment.

Frequently asked questions

Is a CIO more senior than an IT Director?

Generally yes. The CIO owns technology strategy and typically reports to the CEO, with the IT estate beneath them. In businesses with only one technology leadership role the titles are often used interchangeably, so check the reporting line rather than the wording.

What is the difference between a CIO and a CTO?

A CTO owns the technology the business builds and sells; a CIO owns the technology the business runs on. Software companies have both. Non-technology businesses generally need a CIO, whatever they choose to call it.

When should a business appoint its first CIO?

Commonly when technology decisions start carrying material commercial consequence, when data becomes a commercial asset, when the board needs technology risk explained in business terms, or ahead of a significant transformation programme.

Can an IT Director become a CIO?

Often, though the step requires commercial framing and board communication that running an estate well does not automatically develop. Give the candidate an investment case to build and a board session to present before deciding.

Who should the technology leader report to?

A CIO to the CEO or MD, ideally with executive team membership. An IT Director commonly reports to a Finance Director or COO, which is workable — but if technology is strategically important, that reporting line will eventually constrain it.

That inversion is the commonest structural mistake in technology leadership hiring, and it is expensive — a strategist appointed into a delivery problem spends a year producing architecture documents while releases keep slipping. This article sets out where the line falls, which appointment to make first, and when the split becomes necessary.

What each role owns

The CTO owns technology strategy and technical direction. Architecture, build-versus-buy, platform choices, technical risk, and the relationship between what the technology can do and what the business wants to sell. In product businesses the role is externally facing too — investors, partners, occasionally customers. It is a strategic and representational role as much as a technical one.

The VP Engineering owns the engineering organisation and its output. Hiring, team structure, delivery cadence, process, performance management, and the health of a function that may be the largest in the business. Success is measured in shipped work, predictability and retention.

The distinction is not seniority. In many businesses they are peers, and in some the VP Engineering manages more people and more budget. The distinction is what the role is accountable for — direction versus delivery.

Side-by-side comparison

Which to appoint first

Work backwards from the symptom rather than forwards from the org chart.

Appoint a VP Engineering first where the direction is clear but delivery is not. The symptoms are recognisable: releases slipping repeatedly, estimates nobody trusts, engineers leaving, a founder or technical lead spending most of their week unblocking people rather than thinking. This is the more common situation in businesses between fifteen and sixty engineers, and it is where the appointment pays for itself fastest.

Appoint a CTO first where delivery is adequate but direction is not. Platform decisions being deferred, a technical estate nobody has a plan for, an investor or board asking questions the business cannot answer, or a product strategy that depends on technical choices nobody senior is making.

Where the founder is technical — common in early-stage businesses — the CTO function often already exists informally, and a VP Engineering is almost always the right first external appointment. Bringing in a CTO over a technical founder rarely works unless the founder has genuinely decided to step away from technical direction, which they usually have not.

The split point

In smaller businesses one person covers both. The question is when that stops being viable.

Under about fifteen engineers, one role is normal and sensible. A hands-on CTO or a Head of Engineering carries both, and splitting creates overhead the organisation cannot absorb.

Between fifteen and forty, the strain becomes visible. The individual is either neglecting strategy to manage people or neglecting people to think about architecture. Most businesses split somewhere in this band, and most wait longer than they should.

Above forty, running both is genuinely not possible. Businesses attempting it typically have a burnt-out technical leader and an engineering function that has quietly organised itself.

Headcount is a proxy rather than a rule. Multiple products, multiple locations or a regulated environment all bring the split point forward.

How they work together

Where both exist, three things determine whether the relationship functions.

Who the engineers report to. Almost always the VP Engineering. A CTO retaining direct reports across the engineering organisation undermines the appointment immediately and confuses everyone below.

Who owns the roadmap trade-off. When product wants a feature and the platform needs work, someone decides. Usually the CTO, in consultation — but it should be written down, because this is the recurring point of friction.

Whether both report to the CEO. Peer structure works well where the two respect each other’s remit. A VP Engineering reporting into the CTO also works and is more common. What works badly is an ambiguous arrangement where both believe they own the function.

Professional standards for technology leadership in the UK are published by BCS, The Chartered Institute for IT, and where either role is a registered directorship the statutory duties at section 172 of the Companies Act 2006 apply.

Assessment: distinguishing the two at interview

Candidates frequently present for both, so the questions need to separate them.

“Tell me about a delivery problem you fixed. What specifically changed?” — VP Engineering candidates describe process, structure and people decisions with dates attached. CTO candidates often describe a technical solution, which is a different answer to a different question.

“Describe a platform decision you made that turned out badly.” — the CTO question. Look for a specific bet, a specific cost and what they learned.

“How many engineers have you hired and how many have you let go?” — VP Engineering candidates answer both parts readily. Reluctance on the second is worth exploring.

“Explain a technical risk to me as though I were your board.” — relevant for both, decisive for a CTO. If technical exposure cannot be translated into commercial consequence, the board will never fund the fix.

Frequently asked questions

Is a CTO more senior than a VP Engineering?

Usually in title, not always in practice. The CTO holds a C-suite position and owns technical direction; the VP Engineering frequently manages more people and more budget. In many businesses they are peers reporting to the CEO.

Which should a scale-up hire first?

Usually a VP Engineering, because the common problem at that stage is delivery rather than direction — particularly where a technical founder is already providing the CTO function informally. Hire a CTO first where platform decisions are being deferred and delivery is adequate.

At what team size should the roles split?

Most businesses split between fifteen and forty engineers. Below fifteen one person can reasonably carry both; above forty it is not sustainable. Multiple products, multiple locations or a regulated environment brings the split point earlier.

Can a VP Engineering become a CTO?

Sometimes, though the two draw on different strengths. The step requires architectural judgement and board-facing communication that running a delivery organisation does not necessarily develop. Test both before promoting rather than assuming progression.

Do the engineers report to the CTO or the VP Engineering?

To the VP Engineering, in almost all functioning structures. A CTO retaining direct reports across the engineering organisation undermines the VP’s authority and creates confusion about who sets priorities.

The difference is almost never the calibre of the appointee. It is whether the family resolved, beforehand, what it was actually handing over. This article covers what to settle before the search, how the assessment differs, and the failure patterns worth knowing about.

Separating ownership from management

In most family businesses the same people own the shares, sit on the board and run the operation. Bringing in an external MD separates the third from the first two for the first time, and that separation has to be made explicit rather than assumed.

Three things need agreeing among the family before any candidate is approached.

Who speaks for the shareholders. An MD receiving different steers from three siblings, or from a founder and their spouse, cannot function. One person should hold the relationship, usually the Chair, with the family aligning privately beforehand.

What the MD can decide alone. Pricing, senior hiring, capital below a threshold, dividend policy, property. Write the list down. Ambiguity here is the single largest cause of failure in these appointments.

What family employment looks like from now on. If family members work in the business, does the MD manage them, appraise them, and have authority to move them? Answering “we’ll see how it goes” guarantees a confrontation in year one.

Where these questions are genuinely difficult, a family constitution or shareholders’ agreement is the right instrument — the Institute for Family Business publishes material on family governance, and the Institute of Directors covers the board dimension.

Where the founder goes

This deserves its own section because it determines more outcomes than anything else.

A founder present in the building without a defined remit will be treated as the authority regardless of the org chart, because thirty years of habit outweighs a job title. If the founder is staying, the boundary needs to be specific, communicated to staff, and enforced by the Chair when it is crossed — which it will be.

What to look for in candidates

Family business MD appointments call for a genuinely different profile from a corporate or PE-backed equivalent, and the differences are worth naming.

Comfort with informal governance. Decisions may be made over dinner. Reporting may be thinner than they are used to. Candidates who need corporate process to function will spend a year trying to install it and lose goodwill doing so.

Patience with legacy. Long-serving employees, customers the founder has known for decades, and practices that make no sense on paper but carry meaning. Changing these is possible; changing them quickly is not.

Respect rather than dismissal. The strongest candidates treat the founder’s judgement as data, even where they intend to change direction. Those who arrive signalling that the business has been run amateurishly do not last, whatever the merits of their analysis.

Motivation that is not purely financial. A family business rarely offers the equity upside of a PE-backed platform. Candidates drawn by autonomy, legacy or the appeal of a business with real roots tend to fit better than those primarily chasing a package.

Prior family business experience is genuinely valuable here — more so than in most sector-transfer questions — because the dynamics are difficult to appreciate second-hand.

Questions worth asking at interview

“Tell me about a time you worked for an owner who was still involved in the business.” — the closest available proxy. Look for how they handled disagreement rather than whether they were right.

“How would you handle a long-serving manager who is not performing but is close to the family?” — this situation will arise. Answers that reach immediately for process, or immediately for tolerance, are both worth probing.

“What would you want to leave unchanged?” — unusually revealing. Candidates who cannot name anything have already decided the business needs reinventing, which family shareholders will detect quickly.

“What would make this not work for you?” — ask directly. A candidate who names a genuine dealbreaker is telling you something useful; one who says nothing is managing you.

The family should meet the leading candidates — not only the founder, and ideally including shareholders who are not employed in the business. Their reaction is data, and their support is what the appointment will need in month nine.

The statutory and shareholder dimension

Settle whether the MD will be appointed as a registered company director. The office is defined at section 250 of the Companies Act 2006 and brings duties including the obligation at section 172 to promote the success of the company for the benefit of the members as a whole — which in a family business means all shareholders, not only those active in it. Where family shareholders have divergent interests, that distinction matters.

Note also that shareholders may remove any director by ordinary resolution under section 168, regardless of service contract terms. Candidates joining a business where one family holds the entire share register understand their position, and being straightforward about it during the process builds more trust than avoiding it.

Frequently asked questions

Should a family business appoint an external MD?

Usually when the founder wants to step back, when no family successor is ready or willing, or when the business has outgrown the capability available within the family. It works well where the family has agreed what authority transfers, and poorly where it has not.

Should the founder stay involved?

They can, provided the role is defined and the boundary is enforced. A non-executive Chair position or a specific remit around key customers works. A founder present without a specified role will continue to be treated as the authority, whatever the org chart says.

Should family members report to the new MD?

Yes, and it should be agreed explicitly before the appointment, including whether the MD can appraise and if necessary move them. Leaving this to be resolved later is the commonest source of conflict in these appointments.

Does prior family business experience matter?

More than in most contexts. The dynamics — informal governance, legacy relationships, shareholder emotion — are difficult to appreciate without having worked in them. It is a genuine advantage rather than a nice-to-have.

How should the package be structured?

Family businesses rarely offer equity, so the structure is typically base plus profit share. Where equity or a phantom scheme is possible it is a significant differentiator, since candidates are foregoing the upside available in investor-backed roles.

Which means a comprehensive list of responsibilities is close to worthless, and frequently counterproductive. This article sets out what belongs in an MD job description, what to leave out, and the two sections that separate a document strong candidates respond to from one they skim past.

What strong candidates are reading for

Before the structure, it helps to know what an experienced MD is actually looking for when they open the document.

Has this business decided what it wants? A description listing twenty responsibilities in no particular order reads as a board that has not agreed a priority. Candidates infer, usually correctly, that the first year will be spent establishing what the job is.

What authority comes with it? Specifically: what can be decided without going back to the owner or the board. This is the single most consequential thing in the document and the one most often absent.

Why is the role open? Growth, retirement, a departure, a founder stepping back, a business in difficulty. Each implies a very different job, and candidates will work it out at interview anyway.

Is this honest? Descriptions that describe an untroubled business needing steady stewardship are rarely accurate, and experienced candidates discount them accordingly.

The structure that works

Six sections, in this order, and the whole document should fit on two pages.

1. The business, briefly and factually. Sector, revenue, headcount, sites, ownership structure, how it makes money. Four or five sentences. Resist the marketing copy — candidates at this level want to know what they would be running, not how exciting it is.

2. Why the role exists now. The genuine reason. “Our founder is stepping back from day-to-day management after twenty-two years” tells a candidate more than a paragraph about strategic ambition, and it attracts people who want that specific challenge.

3. What must be different in twelve to twenty-four months. Three outcomes at most, stated concretely. This is the section that does the most work and the one most descriptions omit entirely.

4. Scope and authority. Reporting line, direct reports, P&L responsibility, approval limits, and whether the appointee will be a registered director. Be specific about numbers where you can.

5. Experience that genuinely matters. Three or four requirements, each with a reason. Not a list of twelve attributes that describes nobody.

6. Package and process. Range, structure, location expectation, and how many stages the process has. Withholding the range at this level filters out strong candidates rather than weak ones.

The outcomes section, in detail

This is where most descriptions fail, so it is worth being precise about what good looks like.

The right-hand column is harder to write because it requires the board to agree what it actually wants. That is the point. A description that cannot state three concrete outcomes is telling you the brief is not settled, and no amount of polish fixes that.

The statutory question

State plainly whether the appointee will be a registered company director. Many MD job descriptions do not, and it is a material term.

The office of director is defined at section 250 of the Companies Act 2006 and arises from formal appointment and filing at Companies House. A registered director carries statutory duties — including the duty at section 172 to promote the success of the company — along with personal exposure. GOV.UK sets out what that involves.

Note also that someone acting as a director without formal appointment may be treated as a de facto director in any event. Being explicit in the description, and settling directors’ and officers’ cover before the offer, avoids an awkward conversation later.

What to leave out

The exhaustive responsibility list. Anyone qualified for the role knows an MD is accountable for performance, people and strategy. Twenty bullet points restating that signals a document written by committee.

Generic personal qualities. Dynamic, visionary, results-driven, hands-on. These describe every candidate and filter nobody. If a personal quality genuinely matters — comfort with a founder still present, tolerance for a family shareholder group — say that specifically instead.

Inflated qualification requirements. Requiring an MBA or a specific degree narrows the field without improving it, and can be indirectly discriminatory if it cannot be justified as relevant to the role. Guidance on fair recruitment practice is published by Acas.

“Other duties as required.” Standard in junior descriptions and faintly absurd at MD level, where the whole business is the remit.

Marketing language about the company. Exciting, fast-paced, market-leading. Candidates at this level are assessing the business, and unsupported superlatives make them more sceptical rather than less.

Title: Managing Director or CEO?

Worth settling before the document is written, because it determines who applies. Managing Director is the traditional British title and remains standard in owner-managed businesses, SMEs and UK subsidiaries. Chief Executive predominates in listed companies, investor-backed businesses and groups.

The practical question is what your target candidate market will read as the right level. Someone currently running a £30m UK manufacturer will see Managing Director as a comparable move; someone from a PE-backed group may read it as a step down. Neither title is more senior in itself, and the Institute of Directors publishes useful material for those new to either role.

Frequently asked questions

How long should a Managing Director job description be?

Two pages. Longer documents dilute the sections that matter — why the role exists, what must change, and what authority it carries — behind responsibility lists that add nothing for a candidate at this level.

Should the salary range be included?

Yes at MD level. Withholding it filters out strong candidates, who have options and will not invest time in an unquantified opportunity, rather than weak ones. A range with the bonus and equity structure indicated is sufficient.

What are the most important sections?

Why the role exists now, what must be different in twelve to twenty-four months, and what the appointee can decide without returning to the board. Most descriptions omit at least two of the three.

Should the description say the appointee will be a company director?

Yes. Registration at Companies House brings statutory duties and personal exposure, and it is a material term of the appointment. Confirm the position and the directors’ and officers’ cover before making an offer.

Is a job description still necessary if a search firm is running the process?

Yes, though its purpose changes. It becomes the document that forces the board to agree what it wants before candidates are approached — which is the most valuable thing it does, regardless of who sends it out.

The question is when that stops being true — and boards typically answer it about a year later than they should, having discovered the gap during a transaction or a difficult board meeting. This article sets out what each model actually delivers, what it costs in more than money, and the specific triggers that should prompt a change.

What outsourcing genuinely covers

A corporate services provider will maintain your statutory registers, file your confirmation statement, process director appointments and resignations, record allotments and charges, and provide a registered office. Filing at Companies House will be timely and correct.

That is genuine value and it is delivered efficiently. Understand clearly what it is: administration of the record. It is not governance advice, and providers are careful to say so in their engagement terms.

What outsourcing does not cover, in most standard arrangements:

Board and committee support. Agendas, papers, attendance and minutes. Some providers offer this as an extra; most standard packages do not include it, and where they do the provider is not in the room for the discussion that produced the decision.

Governance advice in the moment. A director declares an interest mid-meeting, a resolution turns out to require shareholder approval, or a decision needs a paper trail nobody has prepared. Advice by email two days later is not the same service.

Judgement about the record. Minutes must evidence that directors considered the relevant matters and discharged their duties — companies must keep records of directors’ meetings and retain them for ten years under section 248 of the Companies Act 2006. Deciding how much detail belongs in them is a judgement call made by someone who understands the business.

Anticipation. A good internal appointment tells the board what is coming. An outsourced provider responds to instructions.

The three models compared

The fractional option is the one boards most often overlook. An experienced company secretary working across several boards, typically two to four days a month, attends meetings, keeps the minutes properly and can be asked a question. It sits at a fraction of the cost of a permanent appointment and covers most of what growing private companies actually need.

The five triggers to move

External investment. The most common by a distance. Investor directors arrive with consent matters, reserved powers and an expectation that board process is documented properly. Outsourced filing does not meet that expectation, and the gap becomes visible at the second board meeting.

Independent directors joining. Non-executives rely on the record because they are not in the business day to day. They also expect access to governance advice that is not filtered through the executive — the UK Corporate Governance Code provides that all directors should have access to the Company Secretary’s advice.

A transaction in prospect. Due diligence exposes unminuted decisions, share allotments never filed and PSC registers that have not kept pace with ownership. Buyers price that risk. Fixing it beforehand is cheaper than discounting for it.

Regulatory permission. An FCA authorisation, a licence, or a public-sector contract with governance conditions. Someone internal has to own the compliance calendar and be answerable for it.

Board meetings becoming substantive. When meetings shift from monthly management updates to genuine strategic decisions with dissent recorded, the quality of the minute-taking stops being administrative and becomes evidential.

Cost, honestly compared

Comparing the three on headline price is misleading, because they are not the same service. A fairer comparison considers three things.

What the board’s own time is worth. Directors preparing their own papers, chasing their own agendas and drafting their own minutes is expensive labour applied to administrative work. In many businesses this cost alone approaches the fractional option.

The remediation cost. Bringing a neglected statutory record up to date is a project, not a task. Boards that leave it until a transaction pay for it under time pressure and with lawyers involved.

The value of advice not taken. Harder to quantify and usually the largest item. A decision taken without the governance question being raised is a risk carried unknowingly.

Where an individual is engaged through their own company on a fractional basis, the off-payroll working rules apply and, for medium and large private-sector clients, the status determination is the client’s responsibility — HMRC’s guidance sets out the position. Settle it before the engagement begins.

Making the switch well

Do not switch during a transaction. Changing provider or appointing internally mid-process adds risk at the worst moment. Do it a year ahead or wait until afterwards.

Audit the record first. Whoever takes over should begin by reconciling the statutory registers against reality and reviewing twelve months of minutes for gaps. Expect findings; the point is to have them documented rather than discovered.

Keep the provider for filings if you want to. A hybrid arrangement is entirely workable — internal or fractional support for board process and advice, an outsourced provider for routine filings and the registered office. Many well-run boards operate exactly this way.

Record the appointment properly. If someone is being appointed to the office rather than simply doing the work, the appointment must be made formally and filed. This sounds obvious and is frequently missed.

Frequently asked questions

Is outsourced company secretarial support enough?

For a founder-led private company with no outside shareholders, usually yes. It covers filings and registers efficiently. It does not provide board support, governance advice in the moment, or judgement about what belongs in the minutes.

When should a company bring the role in-house?

Most commonly when external investment arrives, when independent directors join the board, ahead of a transaction, on gaining a regulatory permission, or when board meetings become genuinely strategic rather than management updates.

What is a fractional company secretary?

An experienced company secretary working across several boards, typically two to four days a month. They attend meetings, take the minutes, advise the Chair and can be asked a question — at a fraction of the cost of a permanent appointment. It is the option growing private companies most often overlook.

Can we keep the outsourced provider and appoint internally too?

Yes, and many well-run boards do. The provider handles routine filings and the registered office; the internal or fractional appointment handles board process, minutes and advice. Just be clear which party is responsible for what, in writing.

Does the outsourced provider hold the office of Company Secretary?

Sometimes a corporate body is appointed as secretary; often nobody is formally appointed at all, which is lawful for a private company. Check what your arrangement actually is, because boards frequently assume the office is filled when it is not.

The distinction that matters is not the title. It is whether the role holds an office recognised in company law, and whether it advises the board or administers for it. This article sets out where the line falls and which appointment suits which board.

The one legal distinction

Company Secretary is an office recognised in the Companies Act 2006. Governance Manager is not. That single fact drives most of the practical differences.

A public company must appoint a Company Secretary under section 271, and the directors must be satisfied the appointee has the requisite knowledge and experience. A private company is not required to have one at all under section 270 — but where it appoints one, that person is registered at Companies House and holds the office formally.

A Governance Manager holds no such office. They may do much of the same work — board papers, minutes, committee administration, policy — but they do it as an employee performing a function rather than as the holder of a statutory position. Documents requiring the secretary’s signature, and duties the Act attaches to the office, cannot simply be discharged by someone with a governance job title.

Boards sometimes discover this at an awkward moment: a filing requiring the secretary, a resolution needing certification, or a transaction where the buyer’s solicitors ask who the appointed secretary is. It is worth establishing early rather than during due diligence.

Side-by-side comparison

The advisory difference

Beyond the legal position, the substantive difference is advisory standing.

The UK Corporate Governance Code provides that all directors should have access to the advice of the Company Secretary, who is accountable to the board through the Chair. That is a positioning statement as much as a procedural one: the role exists partly to tell directors things they may not want to hear, and its independence is what makes that possible.

A Governance Manager reporting to a General Counsel, Finance Director or COO sits inside the executive rather than alongside the board. They can administer excellently. What they cannot easily do is tell the board that the executive they report to is proposing something improper.

For most private companies that distinction is theoretical until it is not. For boards with independent non-executives, external investors or a regulator, it is live from the outset.

Which should you appoint?

A Company Secretary where the company is public and therefore required to have one; where external investors have joined the board and expect proper process; where the business is heading toward a transaction; or where the board contains independent directors who need advice that is not filtered through the executive.

A Governance Manager where an established secretariat already exists and needs additional capacity; where the volume of committee administration justifies a dedicated role beneath the secretary; or where the organisation’s governance burden is large but the statutory position is already covered, for instance by a General Counsel who also holds the secretaryship.

Both is common in larger organisations, and is the cleanest structure: the Company Secretary holds the office and advises the board, the Governance Manager runs the machinery underneath.

One combination to avoid: appointing a Governance Manager as the only governance resource while leaving the secretaryship formally vacant or held by a director who has no time for it. That arrangement works until the board needs advice or a buyer asks a question.

Qualifications and candidate pools

Company Secretary candidates most commonly hold the Chartered Governance Institute qualification, which is the recognised professional credential, though many effective practitioners come from legal or accountancy backgrounds. For public companies, remember the directors’ obligation under section 271 to satisfy themselves as to knowledge and experience — and to be able to evidence how they did so.

Governance Manager candidates come from a wider pool: governance and risk functions, compliance, legal support, and occasionally project or programme management where the requirement is heavily administrative. Part-qualified CGI candidates studying toward chartered status are common and frequently excellent value, since the role can support their qualification.

A practical point for boards recruiting either: the two markets overlap and candidates move between them, so a CV headed “Governance Manager” may belong to someone fully qualified and capable of holding the office. Read the substance rather than the title, which is advice that applies in both directions.

Frequently asked questions

Is a Governance Manager the same as a Company Secretary?

No. Company Secretary is an office recognised in the Companies Act and registered at Companies House. Governance Manager is a job title with no statutory standing. The work overlaps considerably; the legal position and the board relationship do not.

Can a Governance Manager act as Company Secretary?

Only if formally appointed to the office and registered. Many are, and the dual arrangement is common. What does not work is assuming the function covers the office without the appointment having been made.

Does a private company need either role?

Neither is legally required for a private company. Most appoint one once external investors join the board, a transaction approaches, or the board grows beyond the founders and informal process stops being adequate.

Who should a Company Secretary report to?

To the board through the Chair. Reporting into the executive — a General Counsel, Finance Director or COO — is common in private companies but limits the role’s ability to advise the board independently of the people it reports to.

A Head of Operations runs the operation as it is designed. An Operations Director decides how it should be designed. That distinction determines the budget, the board access, the pay and, most importantly, the kind of candidate who will succeed.

The short answer

An Operations Director sits on the senior leadership team, owns the operational budget, is accountable for the design of the operating model and typically reports to the Managing Director or CEO. Where the role is a registered directorship, it carries statutory duties.

A Head of Operations leads the function day to day, usually reports to an Operations Director or COO where one exists, and is accountable for performance against a plan rather than for setting it. In smaller businesses without a director-tier operations role, a Head of Operations may effectively be the most senior operational person — which is where the confusion usually originates.

Side-by-side comparison

Where the line actually falls

Titles vary enough between businesses that the safest test is not the title but the answers to three questions.

Who signs off capital expenditure? A role that can request but not approve capital is a Head of Operations regardless of what the contract says. Ownership of the capital case is the clearest single marker of director tier.

Who decides the structure? If the operating model — sites, shifts, team design, make-or-buy — is settled above the role, it is a leadership role rather than a directorship.

Who presents to the board? Not who attends occasionally, but who owns the operational section of the board pack and is questioned on it.

There is also a legal dimension worth settling explicitly. Where the appointee is formally appointed and registered at Companies House, they hold the office of director defined at section 250 of the Companies Act 2006 and carry statutory duties with personal exposure. Many people carrying “Director” in their job title are not registered directors, and the two should not be confused.

Which does your business need?

Appoint a Head of Operations where the operating model works and needs running well — a single site performing adequately, a stable service delivered to a known standard, or where an existing Operations Director or COO needs delivery leadership beneath them. It is also the right first appointment for a business of thirty to eighty people that has outgrown the founder running operations personally but does not yet need director-tier scope.

Appoint an Operations Director where the model itself needs changing: a second site, a significant new customer requiring different capability, delivery costs that nobody can explain, or growth that the current structure demonstrably cannot absorb. Also where the founder is stepping back and operational judgement needs to exist independently of them.

A caution worth stating. Businesses sometimes advertise a Head of Operations role at director-level pay to attract stronger candidates without conceding the authority. Experienced operators identify this quickly, and those who accept tend to leave within eighteen months. Match the title, the authority and the package, or be candid about the gap.

Pay and progression

Operations Director packages sit above Head of Operations, though the gap narrows in businesses where the Head of Operations is the most senior operational role. Three factors move the number more than the title does: site count, headcount managed, and whether the role carries capital authority.

The progression from Head of Operations to Operations Director is one of the more common director-tier promotions, and it is where businesses most often promote too early. The step requires commercial fluency — cost to serve, capital cases, board communication — that operational excellence does not itself develop. Where a strong Head of Operations is being considered, give them a capital case to build and a board session to present before deciding. Current benchmarks for both roles are in our directors’ salary guide, and the Institute of Directors publishes material aimed at first-time board appointees.

Frequently asked questions

Is Head of Operations more senior than Operations Director?

No. Where both exist, the Head of Operations reports to the Operations Director. In businesses with only one operational leadership role the titles may be used interchangeably, so check the reporting line and budget authority rather than the wording.

Can a Head of Operations become an Operations Director?

It is a common progression. The step requires commercial capability — building capital cases, understanding cost to serve, communicating with a board — that running the function well does not automatically develop. Test it before promoting rather than after.

Does an Operations Director have to be a registered company director?

No. Many hold the job title without holding the statutory office. Where they are formally appointed and registered at Companies House, they carry statutory duties and personal exposure, so the position should be confirmed at appointment.

Which should a growing business appoint first?

Usually a Head of Operations at around thirty to eighty employees, moving to an Operations Director when a second site opens, when delivery costs become opaque, or when the operating model itself needs redesigning rather than running.

The role varies more by sector than almost any other director-tier position, which is why job descriptions for it read so inconsistently. This article sets out what it consistently covers, how it changes across industries, where it reports and what distinguishes a strong appointment.

The six core responsibilities

Delivery. Getting the product made or the service performed, to the agreed specification, on time. Everything else in the role exists to support this, and an Operations Director whose business is missing delivery commitments has one job until that is fixed.

Cost to serve. Understanding what it actually costs to deliver to a given customer or product line, and acting on the answer. In our experience this is the responsibility most often absent in mid-market businesses — the total cost is known, the allocation is not, and decisions are made on averages that conceal loss-making work.

Capacity and resource planning. Matching people, equipment and space to demand that is rarely smooth. Under-resourcing costs customers; over-resourcing costs margin. Getting this right is a large part of what separates good from adequate.

Quality and compliance. Standards, certification, and the regulatory obligations specific to the sector — food safety, health and safety, environmental permitting, licensing. In some industries this dominates the role entirely.

People leadership. Operations functions are usually the largest employers within a business. The Operations Director typically leads more people than any other director, frequently across shifts and multiple sites, and the practical business of recruiting, retaining and developing that workforce is a substantial part of the job.

Continuous improvement. Systematically removing waste, delay and rework. Not a project but a habit, and the difference between a function that gets better each year and one that simply keeps up.

How the role changes by sector

This variation matters when hiring. An Operations Director from manufacturing moving into professional services will find that the capacity being planned is people rather than plant, and that utilisation behaves differently from machine efficiency. The transfer is possible — the underlying discipline is the same — but it should be a deliberate choice rather than an assumption.

Who does the Operations Director report to?

Most commonly to the Managing Director or CEO. In larger businesses with a Chief Operating Officer, the Operations Director reports into the COO and owns a narrower operational remit while the COO holds the broader executive scope.

Whether the role sits on the board varies. In owner-managed businesses the Operations Director is frequently a registered director carrying statutory duties — the office of director is defined at section 250 of the Companies Act 2006, and appointment brings the duties set out at section 172 along with personal exposure. In larger groups the title is functional and carries no statutory office. The distinction is worth confirming rather than assuming, and GOV.UK sets out what registration entails.

When does a business need one?

Four signals, and they tend to arrive together.

Delivery is slipping as volume grows. Revenue rising while quality or timeliness falls is a structural problem, not an effort problem, and it does not resolve by asking existing managers to try harder.

The founder or MD is running operations personally. Common up to around £5m of revenue and increasingly unsustainable beyond it, because operational decisions start queuing behind everything else the MD is doing.

Nobody can explain the cost of delivery. If cost to serve has never been allocated by customer or product, the business is pricing on assumption.

Complexity has increased. A second site, a new product line, a significant customer with different requirements. Each adds coordination that needs owning.

What a good one looks like

They talk in cost per unit, not in initiatives. Cost per order, per case, per project hour, per bed night — whatever the business’s unit is. Fluency here is the clearest marker of someone who has genuinely owned the function.

They remove work before improving it. The instinct on arrival is to optimise what exists. Stopping activity that should not happen at all is faster, cheaper and more valuable.

They are visible where the work happens. Operations teams judge leadership by presence. Directors who manage from a spreadsheet lose the workforce, and in an operational business that is expensive.

They translate operational risk into commercial terms. A board that does not understand why a single supplier or an ageing asset matters will not fund the fix. Making that case is part of the job.

The Institute of Directors publishes development material for those stepping into board-level roles for the first time, which is relevant given how many Operations Directors are first-time appointees to a board.

Frequently asked questions

What are an Operations Director’s main responsibilities?

Delivery, cost to serve, capacity and resource planning, quality and compliance, leadership of the operational workforce, and continuous improvement. The balance between them varies substantially by sector.

Is a Director of Operations the same as an Operations Director?

In UK usage they are generally interchangeable. Director of Operations is the more common American phrasing and appears in UK subsidiaries of US groups. Check the reporting line rather than inferring seniority from which version is used.

Does an Operations Director sit on the board?

Sometimes. In owner-managed businesses they are frequently registered directors carrying statutory duties; in larger groups the title is functional with no statutory office attached. It should be confirmed at appointment rather than assumed from the title.

What qualifications does an Operations Director need?

No specific qualification is required. Sector-relevant technical credentials matter in regulated industries, and continuous improvement methodologies are common. Commercial literacy and a track record of running a function at comparable scale count for more than certification.

How much does an Operations Director earn in the UK?

Pay varies widely with sector, scale, site count and whether the role carries board status. Manufacturing and logistics sit differently from professional services. Current benchmarks are set out in our directors’ salary guide.