You may find yourself in the uncomfortable position of having to remove a director from your board of directors. This circumstance might happen for one of several reasons:
- The director has a continuing conflict of interest that cannot be reconciled, or is failing in his/her fiduciary responsibilities
- The director is ineffective
- The director is not interacting well with others (the kind way of saying that this person is difficult to deal with).
Some ways to terminate board members include:
Term Limits for Board Members
Most corporations set terms for directors, usually rotating terms, in which one or more directors rotates off the board. A typical arrangement might be for an initial three-year term, with two three-year re-appointments. So, at the end of nine years, the individual must step down from the board. If the person is a valuable member of the board, a temporary non-board position might be found for a year. If you want to remove the board member, the end of the term might be a time to do this.
The most difficult way to remove a director is to have a personal discussion with that individual and suggest that he or she needs to leave the board. The board chairman and the chief executive, and maybe the board attorney might need to be part of that discussion.
Your corporation's bylaws should include a method for formally removing a board member for egregious acts, failure to fulfill duties, or conflict of interest. The vote to impeach should be by a 2/3 majority.
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