Page 15 - Profmark_2024_Directors Guide

TERMINATION OF OFFICE

A Director’s Term of Office may terminate when:
■ It has expired as per the MOI (where applicable)
■ The director resigns
■ The death of the director
■ If he is declared delinquent or becomes disqualified
■ If he is removed by a shareholders’ resolution or the board or a court order.
Resignation
Directors may resign by tendering a letter of resignation.
Removal by the Shareholders
Section 71(1): A director may be removed by an ordinary resolution adopted at
a shareholders meeting by the persons entitled to exercise voting rights in an election
of that director. Before the shareholders may consider such a resolution, the director
concerned must be given notice of the meeting and the resolution (at least equivalent
to that which a shareholder is entitled to receive), and must be afforded a reasonable
opportunity to make a presentation in person or through a representative to the meeting,
before the resolution is put to vote.
Removal by the Board
Section 71: Under certain specific circumstances, the board (provided the company
has more than two directors) may remove a director without shareholder approval.
Section 71 cannot be amended in a company’s MOI.
The board of directors may remove a director from office if there are two or more
directors, and one of the following applies:
■ The director has become disqualified or ineligible to act
■ The director has become incapacitated to the extent that the director is unable to
perform the functions of a director, and is unlikely to regain that capacity within a
reasonable time
■ The director has neglected or been derelict in performance of his duties.
When one of the above assertions has been made in relation to a director, the board
(other than the director concerned) must determine the matter by resolution, and may
then begin proceedings to remove the director.
The board must call a meeting of directors to determine the matter. The director must be
given notice of the meeting and the proposed removal, including a copy of the proposed
13