ALTERNATE DIRECTOR Meaning and
Definition
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An alternate director is a term used in corporate governance, particularly in the context of board of directors. An alternate director refers to an individual who is appointed to act as a substitute or proxy for a regular director in their absence or inability to fulfill their duties. The appointment of an alternate director ensures the continuous functioning of the board and the entity's decision-making process without disruption.
An alternate director is chosen by the regular director they are designated to substitute, usually with the approval of the board or shareholders. They possess similar powers and responsibilities as the regular director and are granted the authority to attend board meetings on their behalf, participate in discussions, vote on matters, and represent the interests of the absent director. They are expected to uphold the same fiduciary duties and legal obligations in their decision-making and governance responsibilities.
The appointment of an alternate director provides flexibility in managing the board's composition and succession planning, enabling companies to maintain continuity and stability even in situations where regular directors are unable to discharge their duties due to various reasons such as illness, conflicts, or other commitments. While alternate directors may not have a permanent place on the board, their temporary representation ensures effective management and governance of the organization.
Etymology of ALTERNATE DIRECTOR
The term "alternate director" is a compound phrase derived from the combination of the words "alternate" and "director".
- "Alternate" comes from the Latin word "alternatus", which means "to take turns". It originally evolved from the verb "alterare", meaning "to change or alter". The word entered the English language around the mid-16th century and was initially used as an adjective to describe something that acts or serves as a substitute or replacement.
- "Director" originates from the Latin word "dirigere", which means "to guide or manage". It is derived from the combination of the prefix "di-" (meaning "apart" or "distinct") and the verb "regere" (meaning "to lead or rule"). "Director" entered English in the 17th century and refers to someone who oversees or manages an organization or a specific area of responsibility.
