BOARD OF DIRECTORS Flashcards
(34 cards)
Who manages the business and affairs of the company according to the 2008 Act?
The board of directors
Under section 66(1) of the 2008 Act.
What are the two types of capacities in which executive directors interact with the company?
- As directors
- Through a separate contract of employment
What is the role of non-executive directors?
They provide objective judgment and contribute to management strategies without being involved in day-to-day operations.
Define non-executive independent directors.
Directors with no links to the company other than their directorship, ensuring oversight and objectivity.
What is an ex officio director?
A director who occupies the position by virtue of an office they hold.
What is a de jure director?
A person who is validly and formally appointed to the position of a company director.
What is a de facto director?
A person who acts as a director without valid appointment.
What is the minimum number of directors required for a private company?
One director
Unless the Memorandum of Incorporation (MOI) provides otherwise.
How many directors must a public company have at a minimum?
Three directors.
What must a person deliver to serve as a director?
Written consent to the company.
What is the difference between ineligibility and disqualification?
Ineligibility is a complete bar to appointment; disqualification allows for potential exceptions.
List three grounds of ineligibility for a director.
- A juristic person
- A minor or legally disabled person
- Failing to meet qualifications set by the MOI.
What can lead to disqualification as a director?
- Court prohibition
- Unrehabilitated insolvency
- Removal due to misconduct involving dishonesty.
What is required for a court to exempt a disqualified person from disqualification?
A full statement and explanation of circumstances leading to disqualification.
Who can apply to declare a director delinquent?
- A company
- A shareholder
- A director
- A company secretary
- A registered trade union.
What actions can lead to a declaration of delinquency under section 162(5)(c)?
- Grossly abusing the position of director
- Inflicting harm on the company
- Acting with gross negligence or misconduct.
What is the duration of a delinquency declaration according to section 162(6)(b)?
Seven years unless extended by the court.
What is the purpose of probation under section 162(7)?
To place a director under scrutiny if they acted inconsistently with their duties.
How can a director be removed according to section 71?
By an ordinary resolution adopted at a shareholders’ meeting.
What notice must be given before a director’s removal by shareholders?
Notice of the meeting and resolution equivalent to what a shareholder is entitled to receive.
What is required for a director to be removed by shareholders?
An ordinary resolution adopted at a shareholders’ meeting by persons entitled to exercise voting rights
This is stated in Section 71 (1) and applies despite any contrary provisions in company documents or agreements.
What must happen before shareholders can consider a resolution to remove a director?
The director must be given notice of the meeting and the resolution, with equivalent notice as a shareholder would receive
This is outlined in Section 71 (2).
What opportunity must be provided to a director before a resolution to remove them is voted on?
A reasonable opportunity to make a presentation in person or through a representative
This requirement is specified in Section 71 (2).
What must the board determine if a director is alleged to be ineligible or incapacitated?
A resolution must be passed by the board, excluding the concerned director
This is part of Section 71 (3).
