Suspend company director

[cb2009]

Hi
we have a company director who underperforming and we are convinced is on the way to a nervous breakdown. Are we able to suspend his directorship as he is not capable of making decisions on behalf of the company.

We want to support him as much as we can and don't really want to remove him as a director only to have to reinstate him at a later date.

We will go through the underperformance issues as per our procedure


What are the options?

Any help appreciated

 

[The Resolver]

In short ,no. You can only dismiss. Of course you (assuming you, with or without others, hold the majority of shares) can agree that he need not attend board meetings or carry out any functions for a while,so that if he does that,then he is assured you will not be able to claim he has breached his director's duties to the company but he still remains on the Board. He might want an indemnity for any thing done while he is 'suspended').

I assume from 'under-performing' that he is also an employee of the company, beyond his directorship. That is another matter and of course,as with any employee, you may be able to suspend for significant performance issues subject to your company's disciplinary rules' YOu may wellhave a potential liablity to his ill health if you do not relieve him of his duties since he may have a potential stress at work claim .

I help resolve inter-shareholder/inter-director disputes (which I assume though this is not, there may well be a conflict between respective wishes of the parties) and could draw up an agreement to cover what you seek. In any event you are welcome to give me a call to discuss

 

[Paul Murakami]

I agree with the previous post - you need to distinguish between the individual's role as director and as employee.

In relation to the director role - it may be simplest to remove him as a director. That's also probably better for him: as a director, he's subject to various legal duties, and it sounds like he can't comply with them right now. It's very simple to reappoint him at a later date.

As per the previous post, by far the best way to deal with this kind of situation would be to reach an agreement.