Removing Patrick Cheetham as Executive Chairman6 Jun 2025 14:47
How to Start the Process & What You Need:
Gather Shareholder Support: This is the most crucial step. You need to identify and build a coalition with other shareholders who share your concerns. To requisition a general meeting to propose the resolution, shareholders holding at least 5% of the company's paid-up voting share capital can require the directors to call a meeting.
Special Notice of Resolution: The shareholder(s) intending to propose the resolution must give "special notice" in writing to the company. This notice must be given at least 28 clear days before the general meeting where the resolution will be proposed.
Grounds for Removal: While you don't legally have to state a reason for removing a director by ordinary resolution, clearly articulating the reasons (e.g., poor performance, lack of income generation over 25 years) can help gain wider shareholder support and strengthen your case.
No Obligation to Recommend a Replacement: You are not legally required to recommend a replacement director when proposing to remove an existing one. The focus is solely on the removal. However, having a plan or potential candidates in mind could be beneficial for the company and for reassuring other shareholders about future leadership.
2. Company's Obligations Upon Receiving Special Notice:
Notify the Director: The company must immediately send a copy of the special notice to the director concerned.
Director's Right to Make Representations: The director has the right to make written representations to the company (of reasonable length) and require them to be circulated to shareholders. If the representations are received too late or not circulated, the director can require them to be read out at the meeting. The director also has the right to attend the meeting and speak on the resolution, even if not a shareholder.
Convene a General Meeting: The company's board should hold a meeting to convene the shareholders' general meeting where the resolution will be put to a vote.
Notice to Shareholders: The company must give all shareholders notice of the resolution at the same time and manner as it gives notice of the meeting, or if not practicable, by other means allowed by the Articles, at least 14 days before the meeting.
3. What You Need for it to Pass:
Ordinary Resolution: To remove a director, an ordinary resolution is required. This means it needs a simple majority (more than 50%) of the votes cast by shareholders present (in person or by proxy) and entitled to vote at the general meeting.
Meeting Format: The resolution must be proposed at a formal shareholders' general meeting and cannot be passed as a written resolution.
Voting: Votes are typically decided by a show of hands unless a poll is demanded. In a poll, each share usually represents one vote.
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