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  • Overview

    This article was first published in on 12 February 2015.

    How to tackle the issue of misbehaving directors before the rot sets in.

    Taking on a directorship is synonymous with taking on a raft of responsibilities and duties.

    It is perhaps unsurprising therefore that many directors have the propensity to misbehave.

    This misbehaviour can present itself in more ways than one and ranges from breaches of the general duties of directors under the Companies Act 2006, to misdemeanours caused by aggressiveness or dominance in the board room.

    Historically, boards of directors have been reluctant to tackle these problems; preferring instead to use retirement ages and expiration of terms to remove offending parties.

    However, it seems that modern day boards and shareholders are tiring of this tolerant approach.

    Companies are increasingly adopting more effective internal governance processes to weed out problem directors; and shareholders are using their codified right to take action in the courts. 

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