Challenge appointment as director

Question 1

Board of directors

Answer 1

A director is an appointed or elected member of the board of directors of a company who, with other directors, has the responsibility for determining and implementing the company’s policy.

Question 2

Individual shareholders

Answer 2

Individual shareholders have no cause of action in law for any wrongs done to the corporation and that if an action is to be brought in respect of such losses, it must be brought either by the corporation itself (through management) or by way of a derivative action. So Bart could not ask the company to bring a derivative action in his capacity as a director.

Question 2

Appointed by shareholders

Answer 2

Usually appointed by the shareholders by a simple majority vote and can be removed by the shareholders by a simple majority vote at any time, even if the Articles state otherwise. So if Homer can persuade more than 50% of the shareholders to vote that Bart is removed, under Foss v Harbottle, the simple majority vote will be enough.

Question 3

Only 2/3 directors

Answer 3

However, if there are only two/three directors, or Homer has more than 50% of the shareholding, Bart could argue that there is fraud on the minority.