6 - The role of the board - has never explicitly come up!! Flashcards
What decides managerial powers of the board?
Articles
Model Articles Art.3 - managerial powers
‘Subject to the articles, the directors are responsible for the management of the company’s business, for which purpose they may exercise all the powers of the company’
Can a director exercise all powers of the company on their own? Exceptions?
No, unless they are the only director, or the articles delegate such power to him
Can members still exercise managerial power if they have delegated it to directors?
No, unless the articles provide otherwise
Why is it often the case the powers of management are vested in directors ‘subject to the articles’?
As there may be another provision which allows this power to be overruled
Model Articles - Article 4(1)
Members may ‘by special resolution, direct the directors to take, or refrain from taking, specified action’
Why is article 4(1) often not used, even in companies where directors are not majority shareholders?
It is easier to pass ordinary resolution to remove directors under S.168
3 instances where powers of management delegated back to members
- No BoD
- Directors refuse to attend BMs
- Board cannot achieve quoracy
Model Articles - Article 5(1)
Subject to the articles, the directors may delegate any of the powers which are confronted on them under the articles:
(a) to such person or committee;
(b) by such means;
(c) to such an extent;
(d) in relation to such matters or territories; and
(e) on such terms and conditions;
as they think fit
Model Articles - Article 5(2)
Sub-delegation - directors can authorise person with delegated powers to delegate their powers to other persons
Model Articles - Article 5(3)
Directors are free to modify or revoke any delegation of their powers, in full or in part
Model Articles - Who can call BM?
Any director
Model Articles - How is BM called?
By providing notice to other directors
What must notice of a meeting state?
- Date and time of meeting
- Where the meeting will take place
- How directors should communicate if not in same place
How long must notice of BM be?
No specification, just must be sufficient and reasonable based on circumstances
