The British theatre director Terry Hands has died at the age of 79. Over a long and hugely respected career in the theatre, Hands was a co-founder of the Everyman in Liverpool, served as the artistic director of the Royal Shakespeare Company in Stratford-upon-Avon and turned around the fortunes of Clwyd Theatr Cymru in Mold.

He was acclaimed for meticulous Shakespeare productions, often illuminated by Hands himself as lighting designer, and starring such actors as Alan Howard, Antony Sher, Sinéad Cusack, Owen Teale and Helen Mirren. His RSC production of the uncut Henry VI trilogy, starring Howard and Mirren, won him an Olivier award in 1978 for best director.

Born in Hampshire, Hands studied English at Birmingham University and attended the Royal Academy of Dramatic Arts, London, from 1962-64. With two friends and scant finances, he set up the Everyman in Hope Street in Liverpool on the site of a chapel, which was still operating as a cinema in the theatre’s early days. The theatre opened its doors in 1964 with a production of Henry IV Part I.

By 1966 Hands was at the RSC where he would direct several landmark productions and was made co-artistic director, with Trevor Nunn, in 1978. For five years, from 1986, Hands ran the RSC alone, as artistic director and chief executive. He left in 1991 after 25 years with the company and was succeeded by Adrian Noble.

Terry Hands at the Aldwych theatre in London, where his Henry VI trilogy was staged. Photograph: Peter Johns/The Guardian

During Hands’ time at the RSC, the organisation underwent a huge expansion including the introduction of the Swan theatre in Stratford in 1986, created from the shell of the Memorial theatre dating from 1879. His celebrated production of Cyrano de Bergerac with Derek Jacobi transferred to New York in 1984 but Hands had a notable misfire with a 1988 musical version of Stephen King’s Carrie, which bombed on Broadway and closed days after opening.

Hands said he was often asked why he would want to run the RSC. His answer was “embarrassingly unfashionable”, he admitted: “Some of us still believe in a career of public service over and above a life of private profit or even comfort.” In 2014, Sher – who played Tamburlaine in a Hands production – described him as “brilliant at the job, tireless. He’d work 25 hours a day if allowed to – and he knew the ins and outs of every department”. In a statement, Sher said: “He was a brilliant and witty man, and a remarkable director, able to create real stage magic, epic images of beauty and power.” Gregory Doran, the RSC’s artistic director, said: “I first worked with Terry in his 1987 production of Julius Caesar with Roger Allam as Brutus, and was his assistant on Romeo and Juliet with Mark Rylance as Romeo the following year. He taught me to honour the driving impulse under Shakespeare’s text, and how to share that with an audience, and keep them gripped by that momentum.”

In 1995, Hands directed Lauren Bacall in what he called a “brave and quietly menacing” performance in The Visit by Friedrich Dürrenmatt at Chichester Festival theatre. He then spent almost 18 years at Clwyd Theatr Cymru (now Theatr Clwyd), which was threatened with closure when he arrived. Hands transformed it into a first-rate repertoire-led ensemble. After serving as joint artistic director and chief executive, he bowed out there in 2015 with a production of Hamlet that the Guardian’s Alfred Hickling called “dazzling in every respect”.

Hands was appointed CBE in 2007. He is survived by his wife, Emma; his daughter, the actor Marina Hands, from his marriage to Ludmila Mikaël; and his sons, Sebastian and Rupert, from his relationship with the actor and dancer Julia Lintott.