The procedure for the removal of a director is provided for in section 176 of Companies Act
(Act 992).
A director may be removed by an ordinary resolution at a general meeting despite anything in the
company’s constitution or in an agreement with the director.
Members of the company must be given notice of 35 days of the proposed ordinary resolution to
remove the director(s).
The director to be removed shall also be notified and shall have the right to be heard on the
resolution at the meeting and also to send the company a written statement, copies of which the
company shall send with every notice of the general meeting. The notice must be sent at least 7
days before the meeting.
The written statement of the director should be read at the meeting not withstanding his right to
be heard orally.
DUTIES OF A DIRECTOR
Per section 190, a director owes fiduciary, common law and statutory duties to the company.
Directors have a duty to protect the interests of the company, take reasonable care in the
management of the affairs of the company while acting in the best interest of the company with
the utmost good faith.
A director who fails in his duties under the law or does acts not specifically mentioned in Act 992
but is not aligned with the best interests of the company is liable to be removed from office by
members with the procedure enumerated above.
The Act also provides for the use of legal proceedings to enforce civil liabilities for the breach of
duties by a Director under section 200
CAN THE BOARD OF DIRECTORS OR MEMBERS SUMMARILY REMOVE A DIRECTOR
The case of Pinamang v Abrokwa provides that one has to first use the procedure set out in the
Act to remove a director failing which one may seek relief under section 219 for a court order.
The case of Adams v Tandoh seems to suggest that a director may be removed summarily
however the facts of the case suggest that this can only be done when the director engages in
criminal conduct and disqualifies himself to hold the position of a director. Section 177 of Act
992 outlines the acts that may automatically disqualify a director from occupying said position.
The law as set out in Act 992 suggests that Directors may fill a casual vacancy that occurs
however there is nothing in the law to suggest summary removal of a director by other means
other than by the procedure set out in section 176.
It is trite that a written resolution passed by directors or members is valid as though it had been
passed at a general meeting; However the Act in section 163 is clear that such a resolution cannot
be used to remove a director.
The Board of Directors may therefore not summarily dismiss another director as this may deny
him of his right to a fair hearing and breach of the rules of natural justice. A failure to follow the
procedure in section 176 may open the company and the directors involved up to liability and
litigation.
LEGAL OPINION
From the foregoing, it is clear that a Director may be removed by following the procedure the
Act has provided. The Act and the case law are clear on the position that it is only after the
procedure has been used that one may proceed to court for an order under section 219 or
proceed under section 200 to enforce the civil liabilities of the defaulting Director
It therefore my reasoned opinion that the Directors of Hords PLC may pass a written resolution
for the Removal of the defaulting Director outlining the reasons for its necessity to the members
of the Company. The members of the Company will however have to take the final decision
following the proper procedure laid out in Act 992 to avoid any unintended consequences of
litigation or increased hostilities from the said member. An attempt to summarily remove said
Director and a later ratification by the Members will not be in accordance with the law and may
therefore be ruled by a Court to be of no consequence.
