Any thoughts on this situation......

[PIGDOG]

Hi all,
Bit of a long one here.......
I've got a bit of a problem here with my fellow shareholder/director.
At the end of last year we had a discussion & I told him that I was not happy with the way things for several reasons.
First, he has lost his drive as far as sales is concerned & over the last few years we have lost customers worth 300k per year .
We have 10 members of staff & he takes more time of sick than everyone else put together - about 5/6 weeks last year.
And he does not treat members of staff very well. He is often rude & can go for days without talking to anyone.
So those were the main points raised with him in December & he agreed with much of what I said saying that he has taken his eye off the ball recently. We agreed that he would make more effort this year.
I was not entirely convinced that he could turn it around but agreed anyway.
Everything has now been thrown up in the air 3 weeks ago when his wife left him & he has not been into the office since.
I have decided that we can not continue like this & there is little chance of him agreeing to sell his shares. So my question is this: Is there a way that I can force him into resigning as a director (because he is unable to fulfil his duties as an employee & director of the company) or force him into selling all/part of his shares?
Cheers

 

[thebigIAM]

Too much business energy is wasted on this sort of thing!

It sounds like his marital problems have been building up for some time. And that he's clinically depressed.

Was he a good mate, once?

It sounds like he just can't help himself. If he's a liability, you're better off not having him in the workplace. Encourage him to take as much sickleave as he needs which trickles down to a point where it is unpaid. Do not agree a dividend. Then if he moans that he's broke, ask if he wants to sell some of his shares.

 

[PIGDOG]

We worked together before buying the company & I could never describe as good friends.
At what point do you think I can insist that his sick leave is unpaid?

 

[mobyme]

Your argument sounds to me a little one sided to me. Sales in some industries have been on the slide for at least two years. Poor sales figures and a lack of support from your co-directors; great, just what everybody needs. So if the firm is falling to pieces through his lack of effort; it begs the question, what have you been doing? From the way you explain it there is nothing to stop your co-director from trying to oust you. It sounds to me like a company that is pulling itself to pieces through lack of team work. Don't you think it's about time to lend a hand to a guy who is going through a lot of personal problems. Remember this is the same guy who helped you build things in the first place. No, Don't tell me, that was all down to you!

 

[PIGDOG]

Of course you are only getting my side of the story.
Our sales figures have not been on the slide (we have 4 other sales people here that are all growing business) and the business is not failing. To answer your question about what I have been doing, I am responsible for nearly a third of the companies turnover.
I have been supporting him & trying to help over the last year or so but there was still no improvement.
I understand that he has lots of personal problems but the longer this goes on, the greater the risk that it will start to seriously start to impact the business.

 

[Boris]

Of course you are only getting my side of the story.
Our sales figures have not been on the slide (we have 4 other sales people here that are all growing business) and the business is not failing. To answer your question about what I have been doing, I am responsible for nearly a third of the companies turnover.
I have been supporting him & trying to help over the last year or so but there was still no improvement.
I understand that he has lots of personal problems but the longer this goes on, the greater the risk that it will start to seriously start to impact the business.

How frustrating it must be for you mate,i am sure you have tried with the arm round the shoulder stuff aswell, your biz and income is much more important than him taking all the time off that he does, sometimes you have to be cruel to be kind, i really hope that you both sort out what is needed as he could really mess up the company moral.

 

[mobyme]

Sorry I am confused

First, he has lost his drive as far as sales is concerned & over the last few years we have lost customers worth 300k per year .

How do you know this all down to him?

We have 10 members of staff

Our sales figures have not been on the slide (we have 4 other sales people here that are all growing business)

50% of your company is made up of the sales team (4 others + co-director)have you added to your sales force over the last few years and increased the sales leads count accordingly? Are you sure that as a director he hasn't been been letting the others have the leads or conversely is it the case that although he is a co-director, you have assumed authority and treated him as a member of staff?

And he does not treat members of staff very well. He is often rude & can go for days without talking to anyone.

If your a director of a company where your co-(equal)director has assumed authority and treats you like a member of staff, I guess you are entitled to have the hump. Unspoken lack of respect caused by a deteriorating relationship between directors will quickly spread into the workforce and very often causes this sort of reaction.

So those were the main points raised with him in December & he agreed with much of what I said saying that he has taken his eye off the ball recently. We agreed that he would make more effort this year.
I was not entirely convinced that he could turn it around but agreed anyway.

Sorry but it still sounds a bit like a Witch hunt to me.

I have decided that we can not continue like this & there is little chance of him agreeing to sell his shares. So my question is this: Is there a way that I can force him into resigning as a director (because he is unable to fulfil his duties as an employee & director of the company) or force him into selling all/part of his shares?

I still cannot get my head around this. If you are the one that is unhappy with the situation why aren't you the one offering to sell your shares to him. You are the one that wants to end the relationship, so why aren't you the one that is doing the leaving? I could be wrong but it appears that you are assuming that he is in some way subservient to you whereas you are in fact equal shareholders or else getting rid of him should present no obstacles.

 

[Steve2507]

And that he's clinically depressed.

Being someone who had a breakdown I would say this is highly likely.

At the moment it seems as if you are gunning for him rather than trying to help him. You are trying to drive him out of the business and by the sound of it belittle him. Trying to stop sick pay of someone who may be seriously ill is wrong. And anyway if you try and stop that could he call a shareholders meeting and table a motion that directors pay is cut.

How frustrating it must be for you mate,i am sure you have tried with the arm round the shoulder stuff aswell, your biz and income is much more important than him taking all the time off that he does, sometimes you have to be cruel to be kind, i really hope that you both sort out what is needed as he could really mess up the company moral.

It sounds like he just can't help himself. If he's a liability, you're better off not having him in the workplace. Encourage him to take as much sickleave as he needs which trickles down to a point where it is unpaid. Do not agree a dividend. Then if he moans that he's broke, ask if he wants to sell some of his shares.

Thank God I don't work with either of you. It is this sort of attitude which pushes people to suicide due to work related stress (and believe me I know this, I have been there).

If he is depressed then what you need to do is contact his family e.g. children, siblings etc. Ask if they can have a word to see if he is seeing a Doctor. If there is no one who you can speak with aproach him in his own home (he will be more open) and suggest he seek medical help.

Get this sorted out using medical assistance. Not the arm round the shoulder stuff as you are not qualified, proper medical assistance.

Alternatively contact your own Doctor and get advice from them, they will know the best way forward or at least be able to put in touch with someone who can help further.

As you can tell I have very strong views with the way depression is dealt with. If you try and get all the help you can for him then I wish you all the best. However if you do not and try to drive him out then I hope you fail and the business suffers, sorry to say it but maybe it will be the only way you can realise how bad depression can be.

Of course he could just be taking the Mick and so you are well in your right to force him out but make sure he isn't depressed first.

 

[thebigIAM]

Yeah. That was a bit heartless.

But I'd say most companies will try to shoehorn out their employees if depression leads them unable to perform their jobs for more than a year.

If the guy was a sole trader with no/few staff, the outcome is even more brutal.

In fact, one of the harshest experiences EVER is to try to run a small business immediately after a bereavement.

When I said about the business energy being wasted, I suppose I meant in the context of friction between fellow directors, and how much simpler things might sometimes seem if you were running a sole member company. (Something that's been at the forefront for me personally in recent weeks).

Some employment contracts will involve a sick leave entitlement of full pay for a year, or full pay for half a year, then half pay for the next half year, and some pay absolutely nothing at all.

Whichever view you take on it, and no matter how frustrated you personally feel (and I'm sure that you must), you will gain more with a sympathetic approach than if you antagonise him.

People aren't machines and there are times when they simply can't perform.

I guess I was thinking of the shoehorning out if you really are certain there's no way back to how things were before.

 

[jniven]

There is unfortunately no somple solution to this. I agree with some comments made by Steve, in that all attempts to support your co director need to be made, and by the sounds of it this will take more than a pep talk from you - he obviously needs medical help. However, where do you draw the line especially if he won't help himself? How long can you let your company suffer? The terms of the directors roles withhin the company will have been laid out in the service agreements when the company was formed, and shares issued. If a director is clearly in breach of this contract, you can push for a forced sale and redistribution of shares. Recommend you get all of this on record with your lawyers now and take their advice. Incidentally - you don't no that this guy is actually clinically depressed or ill for certain. Either way, it's always sad to see someone fall in this way, but alas, business is business. Hope you can get this resolved. Good luck. J