Removing a director: What shareholders need to know
Every company is run by its directors, but what can the members do if they are unhappy with how the directors are performing – can they kick a director out and replace them? It is a fundamental principle of company law that ultimately the members decide who is appointed to run their company, but how does this work in practice?
What do the articles of association say?
If members are dissatisfied with a director and the director will not resign, the first place the members should look is the company’s articles of association.
Companies have a great deal of scope to determine how directors are appointed and removed, and every set of articles will set out how this is done. The articles will usually provide that directors leave office automatically in certain circumstances, for example if they are bankrupt, physically or mentally incapable of fulfilling their duties, or if they fail to attend board meetings. Bespoke articles may contain provision for them to be removed by notice from a certain majority of members, by ordinary resolution, or by the rest of the board. However, the Model Articles (the default articles for a company), and their predecessor Table A, do not contain such provisions, so if the director’s office is not automatically terminated and the articles can’t be amended, how can they be removed?
Removal under section 168 of the Companies Act 2006
Where there is no convenient method provided for in the articles, statute provides a long-established fallback option. This is currently found in section 168 of the Companies Act 2006, and enables the company to remove a director by ordinary resolution at a meeting. This power cannot be excluded or fettered by anything in the company’s articles (although there are some ways to avoid it, as mentioned below). Because removing a director in this manner is the ‘nuclear option’, and the interests of both the director and the members are engaged, there are a number of requirements that must be followed for the removal to be effective.
How does the removal process work?
Firstly, unlike almost all other company resolutions, the resolution must be passed at a general meeting of the company – a written resolution will not be sufficient.
Secondly, special notice of the intention to move the resolution must be given at least 28 days before the meeting at which it is moved, and the company must give its members notice of the resolution either at the same time the meeting is called, or where that is not practicable, at least 14 days before the meeting.
The notice of the intention to move the resolution must also be sent to the director in question when received by the company, and they have the right to protest against their removal. This includes the right to be heard at the meeting, and to make written representations (of reasonable length) to be circulated to the members. This is to ensure that directors get the opportunity to make their case to the members – who, of course, may be swayed by their oratory and decide to keep them in office.
Only an ordinary resolution is required and so a bare majority of the votes at the meeting is sufficient to pass it and remove the director from office. It is wise for members seeking to remove a director to ensure that they will have sufficient support in attendance (in person or by proxy) at the meeting to carry the resolution – if that can be shown, the director may see the writing on the wall and agree to resign without the indignity of being removed.
When might removal not work?
While the provisions of section 168 cannot be excluded by the articles, there are scenarios where there will be no purpose to going through the process. The director may be directly appointed by members with a particular right to do so under the articles, and if they are removed could immediately be reappointed. The articles may also contain weighted voting rights for certain members, which could validly be exercised to prevent removal.
Can a removed director bring a claim?
Members should also note when considering whether to remove a director that this will not affect any other rights that the director has – for example, they may have a claim for a breach of their employment contract. If the director is also a member of the company, they may also have a claim for unfair prejudice after being removed, or a contractual claim for breach of any shareholders’ agreement if, for example, the others have agreed to vote against a certain director’s removal and fail to do so.
Practical considerations for shareholders
It is also worth noting that the resolution must be put to the members in order to be passed, and a director may be reluctant to assist in calling the general meeting that might result in their defenestration. In such a case, members should take note of their powers under the Companies Act 2006 to compel the directors to call a general meeting, and to call it themselves if the board fails to do so ( a further method of letting a director know they are doomed to be removed) and facilitate an orderly departure.
Finally, members should be wary of what will happen to relationships in the company after a director has been removed at a possibly ill-tempered meeting, especially in smaller companies where there are clear factions in the membership and an uncertain majority. Once disgruntled members realise they can remove directors, they can acquire a taste for it!
Contact us
Whether you are considering the removal of a director, responding to concerns about board performance or managing a wider shareholder dispute, early advice can help minimise disruption and protect the interests of the business.
Contact us to discuss your circumstances and the options available to you.
Disclaimer: This note reflects the law as at 13 August 2026. The circumstances of each case vary and this note should not be relied upon in place of specific legal advice.
