An alternate director is a person who is appointed to attend a board meeting on behalf of the director of a company where the principle director would be otherwise unable to attend. The law relating to alternate directors varies from country to country, but in most jurisdictions, the alternate director has the same powers to attend, speak and vote at meetings as the principal director would have had, had the alternate not been appointed. Meetings are sometimes held around conference tables. ... In relation to a company, a director is an officer of the company charged with the conduct and management of its affairs. ... A company is, in general, any group of persons, which are known as its members, united to pursue a common interest. ...
In some jurisdictions, the alternate must also be a director in his or her own right (so in effect, there would be one less person at the meeting, but the director who had also been appointed as an alternate would carry two votes). However such structures are not common in developed legal systems.
The appointment of a temporary alternate is one of the few exceptions to the general rule that the office of a director is not assignable and non-delegable.[1]
Footnote
^ For example, in the United Kingdom, see section 308 of the Companies Act 1985
Statements of a director's fiduciary duties in older cases put a director's fiduciary duty so high that the director was expected to be free from influences which could prevent him or her from considering only the interest of the company.
Unless the articles otherwise provide the alternatedirector should have both original voting rights and the voting rights of the director in whose place he or she acts as a director unless that director is present at the meeting.
Alternatedirectors would be covered by the amendment to section 229 recommended earlier (see para [91]) under which all directors would be under a duty to exercise an active discretion.
Directors who misapply company assets in their hands or under their control will be personally liable as though they had been trustees of that property or funds.
Where, however, the nominee directors whose conduct is objected to are in a minority or deadlock position, it may be difficult to establish that their conduct amounts to conducting the affairs of the company or acting by or on behalf of the company.
Save as otherwise provided in the articles, an alternatedirector shall be deemed for all purposes to be a director and shall alone be responsible for his own acts and default and he shall not be deemed to be the agent of the director appointing him.
Feeds |
Contact