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Can the board sack me if I step down as a Director?

Discussion in 'Legal' started by Q2050, Jan 6, 2009.

  1. Q2050

    Q2050 UKBF Newcomer Free Member

    Posts: 5 Likes: 0
    [FONT='Verdana','sans-serif']Can the board sack me if I step down as a Director? :|[/FONT]
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    [FONT='Verdana','sans-serif']I am a Sales and Marketing Director of a SME circa six mil, the company went through an MBO eighteen months ago of which I wasn't involved ... there are three new owners one ie the MD is ego driven, the major shareholder holds the purse strings but has little or no business acumen ... they both continually override my area of responsibility and will not allow me to make decisions without running them through the board first, which I don't have a problem with, however they argue amongst themselves and the decision becomes stale and the customer has already voted with their feet or the window of opportunity has closed, sales have plummeted under the new ownership and now they have had a change of heart and are allowing me to do all the things which they disallowed previously further more they are now urging me on to work even harder than my current 50 to 60 hours a week putting the marketing and promos in place ... December was the first month in which they allowed me the freedom to get on with my responsibilities and as a result December was the best sales result in over 5 years, by far ... The issue I have is that the company has an acute cash flow problem and I am afraid that it is too late for me to save it from going down ... I am do not feel responsible for the current situation and wish to resign as a Director, my question is, can the board sack me should I resign or what action are they likely to take against me?[/FONT]
  2. Zeno

    Zeno UKBF Regular Free Member

    Posts: 4,508 Likes: 1,223
    Do you mean resign as a director however remain as an employee of the company?

    I assume you have been with the company a long time but what were you before you became a director?
  3. Q2050

    Q2050 UKBF Newcomer Free Member

    Posts: 5 Likes: 0
    [FONT='Verdana','sans-serif']Yes that's correct and I have been with the company for the past 14 years under the previous owner, first as the UK Business Development Manager, then as the UK Sales Manager and for the past 6 years as the Sales and Marketing Director.[/FONT]
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    [FONT='Verdana','sans-serif']Thanks[/FONT]
  4. Zeno

    Zeno UKBF Regular Free Member

    Posts: 4,508 Likes: 1,223
    The million dollar question then - do you have a contract? If so, for being the sales director or the UK business development manager?
  5. Simon-M

    Simon-M UKBF Regular Free Member

    Posts: 2,787 Likes: 636
    Directors do not come under the same law as employees even though they are employees. It is possible that you could be fired. I suggest you speak to ACAS www.acas.org.uk
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  6. Q2050

    Q2050 UKBF Newcomer Free Member

    Posts: 5 Likes: 0
    [FONT='Verdana','sans-serif']
    Sorry for the delay in replying I have been out of the office ... No contract at all, I repeatedly asked for one and in the end I had one drawn up professionally, however they still haven’t signed it![/FONT]

  7. FireFleur

    FireFleur UKBF Regular Free Member

    Posts: 1,869 Likes: 440
    It is hard to work out what your objective is :)

    If you want to resign as a director resign, but then you will lose your job.

    If they wish to rehire you, then they could if you wanted to.

    But you cannot just resign to an employee without director acceptance, and I don't think it will really fly too well if your last act as a director is to employ yourself :)

    Sure a director has less employment rights then an employee, but they also have more responsibility and rights to be privy to information, though they tend to have to be able to get in that position themselves. This is why a new owner tends to get rid of the old directors or puts them on a contract of exit for handover. Legally as a director you can get at information, that even owners cannot get at.

    It does sort of sound like you want to stay on, but not as a director, and the chances to do that successfully with those circumstances is not going to be high. Even if you do pull the appoint yourself employee, then I think the clock starts ticking then and they can just drop a new hire easily.
  8. Q2050

    Q2050 UKBF Newcomer Free Member

    Posts: 5 Likes: 0
    Straight to the point, I like that, good information, I appreciate the advice!
  9. FireFleur

    FireFleur UKBF Regular Free Member

    Posts: 1,869 Likes: 440
    There is a variation that might be legal, but I don't advise it as it could quite easily end up in a court case.

    You can hire a contractor, and that contractor could be yourself. In fact that move is normally done for exit with the owners consent. So, they are directors in name not ability.

    My real advice is leave the company, try and make your exit amicable if you can, but you have to notice when a position is untenable, and it sounds like you are in one. If you play too many games it will get ugly, the game to play is cooperation. Some people use an excuse for this move, so they use something external as a reason. You also want to gauge if they will pay you for your time now, the whole leaving business can easily swamp a job.

    Anyway good luck.
  10. Q2050

    Q2050 UKBF Newcomer Free Member

    Posts: 5 Likes: 0
    [FONT='Verdana','sans-serif']Thanks for that advice ... as mentioned I am being allowed more freedom of late to exercise my own judgement and implement my own marketing idea’s which has resulted in a the best December the company has seen in the past 5 years ... the reason I was asking the question was a matter of considering all my options should my position, as you say become untenable, I am a great believer in the synergies of many ideas and opinions but what was happening with two of the new owners was becoming autocratic with no sound business logic to base their decisions on ... I have decided, following the feedback I have received, to stick at it as it were, and help turn the company round![/FONT]
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    [FONT='Verdana','sans-serif']Thanks again for the advice[/FONT]
  11. Submarine Washer

    Submarine Washer UKBF Regular Free Member

    Posts: 192 Likes: 30
    I've been there. I stayed too long out of loyalty for the brand, not the board.
    Don't make my mistake.

    Get out as Director. Get out as employee.
    (But do it nicely. If it's an inbred industry, then you'll meet them again a few months or years on.)
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  12. Chris Ashdown

    Chris Ashdown UKBF Regular Free Member

    Posts: 4,608 Likes: 1,018
    To me it sounds like what you really want is to clarify your job and define the paramaters in which you need a board meeting to confirm and which areas you can decide on your own as a director

    With your skills and knowledge you may well be able to change the company in the future and from what you say and the present climate it will need new methods and ideas like all companies to survive

    You may well find it colder outside than in
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