Adams Stirling PLC


QUESTION: Some members petitioned the board to permanently remove a particular director from the board. They don't want this person to ever serve on the board again. Is this legal?

ANSWER: The Corporations Code does not provide for the permanent removal of directors. So long as the person meets the qualifications of a director and there are no term limits, he can be elected to the board as often as he wants (assuming he gets enough votes). If you have cumulative voting, almost anyone can be elected, no matter how dysfunctional they might be. To avoid this problem, you need to amend your bylaws to adopt sensible director qualifications and eliminate cumulative voting.

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Adams Stirling PLC