The operation of the board of directors
On many issues, this is the final decision-making body which exercises the company’s powers and which enters into transactions on the company’s behalf. However, as mentioned above more important decisions will be decided at a shareholders’ meeting.
Procedure
The procedure is set out in the articles, particularly arts. 88 – 98, Table A. Resolutions proposed at board meetings will be decided by a simple majority (i.e. 50% + 1 vote)
The articles normally give the directors power to appoint one of themselves as chairman (art.91 Table A). The chairman’s main task is to take charge at board and general meetings, and will probably have a casting vote in the event that the votes for and against a resolution are equal (provided the articles permit this). Arts. 88 & 50 Table A give the chairman the casting vote at board and general meetings respectively. Apart from this the chairman has no special powers.
Retirement and removal of directors
Retirement by rotation
Art.73 Table A requires directors to retire by rotation. All the directors will be required to retire from office at the first AGM, but will automatically be re-appointed unless the members pass a resolution to the contrary. At each subsequent AGM one third of the directors must retire by rotation and be subject to re-election.
Executive directors are exempt from the requirement to retire by rotation. The other directors must take it in turns to one of the third to retire. Retirement by rotation is an important safeguard to members as it enables them to consider the removal of a director from office without putting the matter on the agenda for the general meeting.
The articles may exclude retirement by rotation particularly in small companies where the members and directors are largely the same people.
On many issues, this is the final decision-making body which exercises the company’s powers and which enters into transactions on the company’s behalf. However, as mentioned above more important decisions will be decided at a shareholders’ meeting.
Procedure
The procedure is set out in the articles, particularly arts. 88 – 98, Table A. Resolutions proposed at board meetings will be decided by a simple majority (i.e. 50% + 1 vote)
The articles normally give the directors power to appoint one of themselves as chairman (art.91 Table A). The chairman’s main task is to take charge at board and general meetings, and will probably have a casting vote in the event that the votes for and against a resolution are equal (provided the articles permit this). Arts. 88 & 50 Table A give the chairman the casting vote at board and general meetings respectively. Apart from this the chairman has no special powers.
Retirement and removal of directors
Retirement by rotation
Art.73 Table A requires directors to retire by rotation. All the directors will be required to retire from office at the first AGM, but will automatically be re-appointed unless the members pass a resolution to the contrary. At each subsequent AGM one third of the directors must retire by rotation and be subject to re-election.
Executive directors are exempt from the requirement to retire by rotation. The other directors must take it in turns to one of the third to retire. Retirement by rotation is an important safeguard to members as it enables them to consider the removal of a director from office without putting the matter on the agenda for the general meeting.
The articles may exclude retirement by rotation particularly in small companies where the members and directors are largely the same people.
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