Corporate Governance

Question 1

How can a director be appointed?

Answer 1

Governed by the articles. MA provide that a director can be appointed by OR of shareholders or a decision of the directors.

Question 2

How may a director be removed?

Answer 2

By OR of the shareholders.

Question 3

Can directors vote in shareholder resolutions to remove them from office?

Answer 3

Yes - if they are shareholders, they can vote in that capacity.

Question 4

What notice is required for a resolution to remove a director?

Answer 4

28 days notice.

Question 5

What must a company do if it receives notice of a proposed removal resolution?

Answer 5

It must send the director concerned a copy, even if it decides not to put it on the GM.

Question 6

What is a Bushell and Faith clause?

Answer 6

It is a provision in the articles which give a director who is also a shareholder weighted voting rights at a GM where a resolution to remove them is proposed.

Question 7

What resolution is needed to approve compensation paid to a director removed from office?

Answer 7

An OR is needed unless the payments do not exceed £200 in total or is made in good faith (e.g. settling a connected claim).

A memorandum setting out particulars of such payment must be available to SH for 15 Days before OR.

Question 8

How can a director resign?

Answer 8

They must tender a letter or resignation and the board will pass a BR to accept it.