18 REMOVAL OF DIRECTORS
The removal of a director from a company in South Africa can be conducted through the procedures outlined in Section 71 of the Companies Act 71 of 2008. Below is a detailed explanation of the process:
1. Removal by Shareholders:
- A director can be removed by an ordinary resolution adopted at a shareholder's meeting. Voting rights must be exercised by persons entitled to elect that director.
- The director to be removed must be given notice of the meeting, the resolution, and a reasonable opportunity to make a presentation, in person or via a representative, to the meeting before the resolution is put to a vote.
2. Board Resolution:
- A director can be removed by the board if they have become ineligible or disqualified, incapacitated, or negligent, or if found derelict in duties.
- The board must provide the concerned director with a statement detailing reasons for their removal and allow them to respond before the vote.
3. Court Order:
- A court may order the removal if a director is declared delinquent or incompetent to perform their duties.
4. Other Grounds for Removal:
- A director's removal can be initiated if they resign, become incapacitated, or are declared delinquent.
- An ex officio director ceasing to hold the prerequisite office title or designation is also a valid reason for removal.
5. Filing Requirements:
- The company must file a notice with the Commission within 10 business days after a director is removed.
These procedures ensure that there is a structured and fair process for the removal of directors, allowing for a balance between corporate governance and individual rights.