What is an Alternate Director?

This article explains in simple terms what an alternate director is, what powers they have and how they are appointed.

You will find additional resources to aid in appointing an alternate director in your company. These are downloadable templates for board minutes to appoint and remove an alternate director, and supporting letters to the company.

Alternate directors are treated in all respects as appointed directors and must be registered at Companies House.

When would you appoint an alternate director?

Generally, there are two situations when it may be desirable to appoint an alternate director: firstly, if a director is often away, for example working abroad. Secondly, when a period of absence is anticipated, for example a hospital stay. Having an alternate director in place means that board meetings can still be held and decisions made even when the original director is unavailable.

This arrangement may be unnecessary because the remaining directors can keep the company running in the absence of the affected director, provided there is still a quorum for board meetings. Or they might simply wait until the absence is over to conduct important business. But in small companies with two directors or a sole director, a suitable alternate is sometimes necessary to ensure the smooth running of the company. They are also useful in companies where it is desirable to maintain a certain balance of interests across the board.

Companies with sole directors and model articles may wish to read our article on the Hashmi v Lorimer-Wing case, in which we offer solutions for an important problem for such companies. Also consider adopting our enhanced articles, which solve both problems and several other common issues.

Who can be an alternate director?

A director may appoint any other person (including another director) to be an alternate director. The alternate director can be an individual (which is more usual) or a corporate body (in the case of a corporate director). The company would usually reserve the right to approve the person or body being appointed. The articles of association will list any agreed restrictions on who can be appointed as an alternate.

Generally, if someone would not meet the criteria for being a director then the same criteria would prevent them from becoming an alternate director. For example if they were less than 16 years old or in bankruptcy they would not be eligible.

For other restrictions that prevent an individual from being appointed as a director, see our post on whom to appoint as a director of your company. For a more general guide, see our guide to the appointment of directors.

Where it is company practice to show its directors’ names on letterheads, the names of any alternate directors should be displayed. An alternate may only act as director in the absence of their appointor.

A director may appoint any other person (including another director) to be an alternate director. The alternate director can be either an individual (which is more usual) or a corporate body (in the case of a corporate director).

What powers does an alternate director have?

The articles usually say the alternate is deemed to be a director for all purposes. They can exercise all the powers of the director they are temporarily replacing. In some cases the articles of association might limit certain powers, but typically an alternate has the authority to fulfil the same duties as their appointor.

In general the alternate director is deemed to exercise their own judgement and not to be an agent of their appointor. They are accountable for their own acts and omissions in the same way that the  original director is. We have written separately about the responsibilities of company directors.

An alternate will count towards the quorum at board meetings unless the appointing director is also present.

An alternate director ought to receive all notices and written resolutions just as the original director does. This is good practice. The alternate director should be kept abreast of developments to enable them to function as a decision-maker when called upon.

In general the alternate director is deemed to exercise their own judgement and not to be an agent of their appointor.

Do the model articles allow alternate directors?

It is only possible to appoint an alternate director if a company’s articles of association provide for it. A provision was included in Table A (Companies Act 1985), but there is no similar provision in the model articles (Companies Act 2006) to allow for the appointment of alternates. A special resolution is needed to change a company’s articles. For details, see How to change a company’s articles of association.

Note: A provision does exist for alternate directors in the model articles for public companies. The model articles for private limited companies are silent on the matter, hence the need for private companies to amend the articles to be able to appoint an alternate director.

We have written separately about other reasons why the model articles are not always appropriate. We provide an alternative version which includes, among other useful enhancements, a provision to appoint alternates. Purchase and download the Inform Direct Enhanced Articles (IDEA)

It is only possible to appoint an alternate director if a company’s articles of association provide for it.

If the appointing director ceases to hold office, so does the alternate director, unless it is when the appointor retires by rotation and is immediately re-elected. The alternate’s appointment terminates if the appointor dies or if their directorship terminates, or on the occurrence of any event which would result in the appointor’s termination of office as director were it to happen to them.