Difficult Director

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A director within a family run business (related) has become very difficult to deal with for me and the other director , due to the down turn in business the dept they were working in has been closed and they have not liked the change which has brought them in doors. They are basically working to rule (nothing) and does not speak most days to either of us, we have confronted about attitude but we were only stone walled . It has become increasingly difficult at work. Any suggestions !! Already asked if want to leave but no.
 
Is the ownership split evenly three ways? Have you considered making an offer to buy out his shares?
 
Complainer said:
... Have you considered making an offer to buy out his shares?
Click to expand...
Why bother?

If the two "working" directors represent a majority of the shareholding, call an EGM and un-elect the surly one. He can continue as a shareholder. Consult the Memorandum and Articles of Incorporation for the rules regarding EGMs, periods of notice required, voting, appointing / dismissing directors, etc.
 
Yes already asked if they wanted to leave company but unfortunatly no, we were considering to un elect as a director but would then have to face everyday worse than already is , how can we get them to talk or do we just make it so awkward that they have to confront us about it , we have considered all this but it just makes office life more difficult and its hard enough as it is.... Cheers for ideas
 
My approach would be:
1. Remove the person from the board.
2. Set out in writing the duties the person would need to undertake to a satisfactory standard in order to continue as an employee.
3. Take it from there.

[I take it as a given in all difficult situations that everything is done by the book and everything is fully recorded.]
 
Or

Point 2. Make them redundant (assuming there is no work for them)
 
You need to seperate out his role as a shareholder and his role as a director.

If you do remove him as a director, then you won't have to face him every day, because he won't be an employee. He will still be a shareholder, and you will have to face him at board meetings.

You say that you asked him if he wanted to leave, but did you make him an offer to buy him out?
 
I'm not so keen on rushing towards making the person redundant. First, OP indicates that there is a family as well as a business relationship. Second, the "difficult director" has experienced a big disappointment in the business, and I believe he or she should be helped through the difficulty if that is possible.
 
Yes we are in the process of getting together an offer, yes familys are already not talking and we did try and ask what they wanted but got no where. I suppose redundancy is not a bad one.... Removing as a director but they are still an employee and getting a wage !! We have taught about it a lot and getting an outside view is great so many thanks everyone. We also have to be carefull not to make them feel like its constructive dismissal
 
Is he still bringing in revenue/profit? If not, then redundancy is probably the way to go.
 
There are three distinct areas that you must look at and in order of importance they are :

i) Employee
ii) Director
iii) Shareholder

You need to treat each of them separately and deal with them one by one.

The first one to tackle is employee. If there are to be any changes made they will need to be done in compliance with employment legislation and that is more onerous and there are more openings for litigation than in company law.

How to remove a Director is clearly defined in company law and Shareholder disputes should be covered in the memo and arts of the company.

I would seek the advice of a solicitor not connected with the company or the family and take their guidance. You will also need to clearly set out in your own minds where you wish to go with this.
 
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