13 Mar How to remove the chairman of a body corporate
One of the most important decisions that members of a sectional title scheme make every year is the appointment of trustees. If this decision is taken lightly, it can potentially have a number of negative effects, both in the short- and long-term.
The appointment of trustees has a direct effect on who will be appointed as the chairman; this is why both the decision of appointing trustees and electing the chairman should be made seriously and with full understanding of the consequences.
Appointing a chairman
The appointment of the chairperson takes place at the first meeting of trustees following the annual general meeting (AGM); the decision is not taken by all members at the AGM. The chairperson is appointed by majority vote and serves until the end of the following AGM.
A chairperson, like a trustee, may resign at any time between AGMs; such a resignation then creates a vacancy on the board of trustees. The remaining trustees may choose to fill the vacancy by electing one of the remaining trustees or they may choose to co-opt an additional trustee to take on the role of chairman.
Removing the chairman from office
The chairperson may be removed from office either by the trustees at a trustee meeting or by the members at a general meeting.
If the trustees decide to remove the chairperson, a resolution of trustees will need to be passed by a majority vote which will give effect to the decision. The same applies to body corporate members wanting to remove the chairman. At a general meeting – an annual general meeting or a special general meeting – an ordinary resolution passed by a majority vote will give effect to the decision of the members.
In both instances the agenda for the trustee meeting or general meeting must clearly state the business to be discussed as well as the resolution that will be voted on. Proper notice of the meeting must be given as a decision to remove a chairperson cannot merely be made during a discussion at a meeting.
The members do not have the authority to appoint the new chairperson. This responsibility lies with the remaining trustees.
Removed chairperson remains trustee
A chairperson removed by the trustees or members remains a trustee of the body corporate until the next AGM. It is important to consider this when the intention may be to also remove the person as a trustee.
A person removed as a trustee will automatically be removed as the chairperson but not vice versa. In order to remove a trustee, the members must pass an ordinary resolution by majority vote at a general meeting.
Upon receiving a written request from the members for a general meeting, trustees are responsible to arrange such a meeting. Should the trustees fail to act on the written request within 14 days, the members may arrange the general meeting themselves. Members must take care to comply with the prescribed requirements of the Act when doing so.
The appointment of suitable trustees remains one of the most important decisions taken at AGMs. If these appointments are made responsibly and with consideration, the appointment of the chairperson will likely be one of distinction.
Another blog you may like: How to deal with a vacancy in the board of trustees