12. Directors: appointment and removal

Who is a director

A director is a person appointed to direct and manage the company's business. Section 209 gives the meaning of directors, and section 210 deals with shadow directors, people on whose directions the directors are accustomed to act.

Number of directors

Section 211 says every company registered after the Act began must have at least two directors. If the number falls below two, the company must appoint new directors within one month, and may not carry on business after three months unless it does. A director who knows the company carried on business for more than 30 days with fewer than two directors is liable for the debts incurred in that period. A director must indicate in writing that he accepts his appointment.

Appointment

The members appoint and re-elect directors at the annual general meeting under section 212, and casual vacancies are dealt with under section 213.

Rotation: under section 220, unless the articles provide otherwise, all the directors retire at the first annual general meeting, and one-third retire at each later one, those longest in office going first. A retiring director may be re-elected.

Disqualification

Section 219 disqualifies from being a director:

Age: a person under 18.

Mental capacity: a lunatic or person of unsound mind.

Bankruptcy: an undischarged bankrupt.

Dishonesty: a person convicted, in Sierra Leone or elsewhere, of an offence involving fraud or dishonesty, or an offence connected with the promotion, formation or management of a company.

Sections 217 and 218 also deal with insolvent persons acting as directors and with restraining fraudulent persons. English courts also disqualify directors for unfitness, including serious incompetence, as in Re Barings plc (No 5).

Removal

Section 222 says that, unless the articles provide otherwise, the company may remove a director by ordinary resolution before his term ends and may appoint someone else in his place. The director has the right to make representations to the meeting.

In England, Bushell v Faith upheld an article giving a director weighted votes on a resolution to remove him. Section 96 of the Act prohibits non-voting and weighted shares, so whether a Bushell v Faith clause would work in Sierra Leone is doubtful.

The secretary

Every company must have a secretary under section 249. Under section 254 the secretary's duties include keeping the registers, making returns and other administrative work directed by the board. The secretary may not exercise the board's powers without its authority.