Special Meeting- Part 2: Removing a Director

In Part 1 of our blogs on Special Meetings of Members we shared the process for calling a Special Meeting and the common questions that we receive. Part 2 of our series addresses the specific scenario when a director/officer is to be potentially removed from a sport organization at a Special Meeting.[1]

In the context of the applicable federal/provincial/territorial legislation in Canada, specific terms (such as ‘directors’ and ‘officers’) may shift and your governing documents may apply different names or rules to the positions. In this blog, we will use the term ‘directors’ to refer to all of the individuals that are elected by the members to administer or supervise the management of the activities and affairs of a sport organization. 

Removing a Director: How Does it Work?

A Special Meeting can either be called by the Board of Directors or by a requisition of members that is properly submitted to the organization. This type of meeting can occur at any time. When a Special Meeting is properly called, the notice must clearly indicate the proposed action (i.e. motion). In this instance, the notice would include who is to potentially be removed from the organization, in what role or capacity they are to be removed from, and, ideally, the effective date of such potential removal (the usual intent and the default is for immediate removal. However removing an individual at a later time may be proposed to allow for a transition period).

It is imperative that this Special Meeting is held in accordance with the organization’s bylaws and the applicable legislation that governs the organization’s operations. There are different voting thresholds to remove a director, or there is different language regarding the method of removal, depending on the applicable legislation. 

Bylaws will often (and should) provide the basic guidelines for the removal of a director, such as the voting requirement and the basic rights of the individual(s) facing removal. This commonly includes that they receive notice of the meeting and have the opportunity to attend the meeting and ‘be heard by the members’ (in writing, orally, or both).

Rarely will the legislation or bylaws address some of the more detailed nuances, however, and neither will a parliamentary authority like Robert’s Rules of Order.  These are the grey areas where we can help - below are questions that we commonly receive as it relates to removal of a direct.

What is the process prior to the Special Meeting where a director may be removed?

The process prior to the Special Meeting is the same as any other member meeting: it must include procedures for giving notice and communicating the meeting to members and managing registration, voting, tracking of attendees, chairing the meeting, and any other applicable meeting rules (see our Part 1 blog for more details).

The additional aspect to such a meeting is the management of the key parties involved - namely, the individual(s)/entity(ies) proposing the removal (the requisitioner) and the individual(s) being potentially removed (the named party). 

With respect to the meeting’s requisitioner, they will need to provide the members with a rationale for the proposed removal. Our recommendation is to provide some form of supporting statement in advance, similar to a rationale for the proposed business as referenced in our Part 1 blog.  The statement ideally accompanies the requisition and provides the reason for proposing this action and for bringing the members together. It provides the members of the organization with some information to help them make an informed decision, versus being ‘surprised’ in the moment at the meeting. The statement must be mindful not to make defamatory statements towards the named party, such as making factually false statements or blatantly calling someone a “liar”, “thief”, or a curse word. The statement should be fact-focused and impersonal.  If the requisitioner wants their fellow members to remove a director because they are “not a good Director” or “not fulfilling their roles and responsibilities”, they must be able to explain why or how in a simple and focused manner.  For example, did they breach confidentiality or code of conduct, and if so, how?  Did they fail to attend multiple meetings or activities they were expected to attend?  Did they misspend corporate funds? Documentation that supports this statement may also be permitted and, if the removal is ever challenged in court, will serve to form the ‘record’ of any proceeding.

With respect to the named party, they need to be made aware of the requisition and the Special Meeting. They have the right to the same meeting details, information, and notice as any other director or member. They must be provided with the opportunity to be heard by the members, which means they should be afforded the same opportunity to present information to their fellow members, just like the requisitioner. This could also include the option to submit their own supporting statement/documentation in advance of the meeting for distribution. Just like the statement for the requisitioner should be fact-focused and impersonal, any statement provided by the named party should focus on why they should remain in their current role. The statement should be limited to these reasons rather than any form of ‘counterstrike’ against the requisitioner. The purpose of the meeting (made known via its requisition) is to consider their removal, not to consider the status or behavior of others.

Of course, the timing of submitting and sharing any statements/documentation can be a challenge; the named party will usually want to read the statement provided by the requisitioner before they submit their own. We have also seen situations where the requisitioner has asked to submit a secondary statement after reading what the named party submitted. Further, sometimes the parties will take it upon themselves to issue communications/statements directly to the members themselves, instead of properly channeling all information through the organization.

To mitigate these scenarios, certain meeting rules should be established to ensure appropriate boundaries and to ensure procedural fairness to all parties involved. This is usually where having an independent person, such as a parliamentarian, can be very helpful. 

Can a removal request apply to more than one director?

Yes, provided that the requisitioner is specific at the outset as to who the named parties are. In such instances, it is important to note that, once submitted and the members have received notice of the meeting, the requisition and the listed named parties cannot be altered.  At the meeting, a motion to “add another director” to the list of named parties would not be in order or allowed, as it would be outside the scope of the notice.

It would be procedurally feasible, however, to withdraw a name from the list for potential removal (which is accomplished by the requisitioner before the motion is stated by the meeting chair) or to divide the list, which would lead to the named parties being debated and voted on separately.

Can a lawyer attend the meeting?

A question we often receive is regarding the attendance of a lawyer - more specifically if the named party can bring a lawyer to the Special Meeting with them. In this scenario, the lawyer has not been appointed as a proxy to attend and act on behalf of the absent member, but rather to attend alongside the member to support them. Unless it is specifically identified within an organization’s bylaws that counsel or another representative is permitted to attend the meeting, the lawyer is a guest and is not automatically entitled or allowed to attend the meeting.

Our recommendation in this scenario is to permit a lawyer (or another representative) who is supporting the member to attend, provided that they are identified and confirmed with the organization in advance of the meeting and that they are attending as a non-speaking, non-voting observer only.

If counsel fails to respect the invitation as a non-speaking, non-voting observer, they may be removed from the meeting, similar to how any other guest who disrupts the meeting is handled.

Can I bring witnesses to the meeting?

Only those permitted to attend a meeting of members, per the bylaws, should be permitted to attend the meeting. If there is someone who wishes to speak on behalf of either party, they need to be a member in order to attend. Reasonable exceptions to this rule could possibly include:

  • A lawyer participating as a guest observer as noted above; or
  • If the member is a minor, their parent/guardian should be permitted to act as their spokesperson at the meeting as a witness.

Is the meeting like a trial? What is the process during the meeting?

No, this is not a trial.  While it may feel like a trial at times (often more so to the named party), it is not the meeting’s intent. The organization does not line up witnesses for the prosecution, followed by witnesses for the defense. The parties do not introduce new evidence or file injunctions.  The meeting chair does not ask the members to leave the meeting and deliberate like a jury.  There is no sentencing by a judge if the members choose to remove a director.

The meeting process will be as follows:

  1. To call the meeting to order,
  2. To establish quorum,
  3. To clarify the purpose of gathering (the business as stated in the requisition),
  4. To allow the parties and the members the opportunity to speak (in a controlled and respectful environment). When debate begins, the meeting chair allows the requisitioner to speak to their rationale, and then allows the named party to speak to their reasons for remaining on the Board (both again, in a respectful manner). They then allow for respectful comments or questions from the members (debate on the motion to remove),
  5. To call the vote, to announce the result (and if necessary, clarify any resulting next steps), and
  6. To adjourn the meeting.

Although it is not required (unless stated in bylaw), it is usually a good practice to allow the requisitioner and the named party a more brief and final speaking opportunity at the conclusion of debate (i.e. two minutes or less).  Members then collectively make a decision via a formal vote.

If a director is removed by the members, can they be replaced at the same meeting?

The majority of the statutory authorities prescribe the ability of the members to fill the director vacancy that they have just created at the same meeting. The legislation commonly also permits the remaining directors to fill the vacancy (assuming there is still a quorum of directors), so there are two different actions available.

If the intent of the requisitioner is to have the members determine the replacement at the same meeting, then they should specify this action within the requisition for the Special Meeting.  The members and the organization should then subsequently be prepared to conduct nominations and elections accordingly at the meeting, ensuring that they follow their bylaws as much as possible (i.e. eligibility clauses still apply).

It is also important to recognize the organization’s usual methods for nominating directors, which may include nomination submission deadlines and an application process (i.e. completing a skills matrix questionnaire or a vulnerable sector search) which may also prohibit nominations from the floor. The process of filling the vacancy at the same meeting may run contrary to the methods set out in your bylaws.

While the legislation may allow members to remove and replace members at the same Special Meeting, this is not the preferred route. Should a director be removed, should the organization have defined nomination processes in place, and should the members prefer to fill the vacancy, it is recommended that another Special Meeting be called as soon as possible thereafter to fill the vacancy while adhering to the defined nomination process. This will help to ensure that the organization has directors with the requisite experience and qualifications to effectively run the organization.

Is a vote of ‘no confidence’ the same as a vote to remove?

The term “vote of no confidence” is not used or defined anywhere in Robert’s Rules of Order or other parliamentary authorities.  Unless stated in the bylaws, such a motion would simply be a main motion that expresses a viewpoint on the named party.  Unlike in political proceedings in the House of Commons, such a motion would not remove a director from the Board. A specific motion to remove is necessary to remove a director.

However, this does not prevent the members from presenting a ‘vote of no confidence’ as a way of expressing either their confidence or lack thereof in any of its directors or the Board as a collective.

Navigating a Meeting to Remove a Director

A Special Meeting to remove a director poses additional challenges and sensitivities beyond the usual requirements of a Special Meeting: this type of meeting may become a ‘they-said, they-said’ type of affair that can be difficult to manage; there may also be matters of confidentiality that cannot be shared in statements, which may be frustrating for members and/or make it difficult for them to decide. This meeting is frequently not an enjoyable experience for those who are actively involved and it has the potential to become a memorable event for all the wrong reasons.

As such, applying process and additional rules that mitigate these challenges is crucial. Having an experienced chairperson, who is independent and does not have a direct relationship with the key parties, is also very helpful. Sport Law has two official parliamentarians, as well as our legal team, who are here to help.  Contact us at hello@sportlaw.ca if you need assistance with holding a Special Meeting for this purpose.

[1] It is important to recognize that removal of a director is a serious proceeding with significant implications on the organization and its people.  Attempting to remove another person/entity from their role in the organization is typically not the first solution to addressing existing issues related to performance, strategic disagreements, personal differences, or other organizational incidents.

It is also important to recognize that casting a person/entity in a negative spotlight, in front of their peers, can potentially cause personal suffering and reputational damage. Business continuity and organizational resources will also likely be impacted.  Should any collection of individuals (the members or the Board) seek to remove another person/entity from the organization, it is important to first consider other possible alternatives to mitigate the issues as well as the risks to the organization.

In addition, legal counsel is usually recommended to help navigate circumstances where there may be significant implications/ramifications.

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