Permissions for directories work different than files.

Read bit: this allows affected users to get the list of files in the directory.

   e.g without it "ls" won't return anything

Write bit: this allows affected users to add/rename/delete files within the directory

   Note: this does not include editing of those files, meaning without appropriate file permissions could be a situation where you can rename the file but aren't able to edit or view it.

Execute bit: allows the user to work in the directory, meaning it must be on to allow the Read/Write bits to work.

   Note: With this bit off, you won't be able to access any subdirectories or do anything at all within the directory.

Source