[Talk-GB] UK Chapter Directors' Powers

David Woolley forums at david-woolley.me.uk
Fri Apr 22 12:35:07 UTC 2016

On 22/04/16 12:14, Brian Prangle wrote:
>     *Full powers*. Standard boilerplate text. Easy to do. Downside is
>     that removing powers may require alterations to AoA, and furthermore
>     restricting Directors' powers is quite likely to end up being
>     contentious. Any such process will appear to be a group of members
>     not trusting the Directors.

Anything other than this suggests to me that there is something 
fundamentally wrong in the way that directors are chosen.  All the 
others seem to imply that there is a group of members that doesn't trust 
the directors ab initio!

It would basically be asking for the directors to be figure heads, in 
which case you should have only enough directors to cover for deaths and 
loss of mental capacity.

In particular, note that director and manager are two different roles. 
If you want people to make the top level decisions, make them directors. 
  If you just want them to implement a policy, make them managers. 
(Executive directors wear both hats, although, for quoted companies, I 
believe that the City prefers there to be some non-executive ones.)

>  2.
>     *No powers*. Powers need to be conferred explicitly by the Members.
>     This is the current draft. Downside is that it is likely to limit
>     Directors far too much. Such limitation is likely to be particularly
>     troublesome at the outset.

In my view, the only way of correctly representing this is make all the 
members directors.  I'm not sure whether there are legal limits on the 
number of directors, and some members may be either legally barred from 
being a director or unacceptable to people like insurers.

It would put the directors in an impossible position they could face 
criminal charges, and/or being banned from being a director, because of 
responsibilities that they held, but not have the powers to mitigate the 
>  3.
>     *No powers except those needed for Directors to fulfill legal &
>     fiduciary duties*. Basically an additional clause added to current
>     draft. This is an attempt to allow Directors to do necessary things
>     but not unnecessary ones. Likely to readily twisted for any purpose.

This potentially covers rather a lot of powers.  The core functions are 
those normally delegated to a company secretary, although the directors 
maintain responsibility.

Also, remember that ultimately, if the directors run amok, the members 
will need to take out injunctions in the civil courts.  Unless you 
believe they would be prepared to do so, the AoA is essentially 
unenforceable.  (Although what is in the AoA also has an impact on the 
tax status of the company.)

Also, in an organisation like this, less than 10% of members will take 
any role in governance, except for rubber stamping resolutions proposed 
by the board.

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