"Es" always means "it" and "er" always means "he". In the German context at least.
I suppose the confusion arises when "er" refers to something that would be neuter in English.
For example "Der Hund heißt Bello. ER ist schwarz" (The dog is called Bello. IT is black.)
The dog is masculine in German, so it would be referred to as "he (er)" in German, while in English, a dog would be "it".
With regards to the DL sentence above, if you had a specific context, e.g. Der Direktor trifft alle Entscheidungen. Er ist sehr wichtig. (The Director makes all the decisions. He is very important), then you'd use "er" instead of "it", as you would in English.
The upshot is, if the "it" refers to a noun in a previous sentence/context which is masculine or feminine, you must use "er or "sie", not "es" (unless the noun is neuter). If it's unclear, or removed from any direct context (like the DL sentence you've queried), you can use "es".