7.2.3 The removal or suspension of supervisors

This subsection addresses the issue about the removal or suspension of supervisors, which name refers to NEDs in a British unitary board structure. This issue is important for the discussion about independence. If a certain person, group of persons or corporate body is responsible for the removal or suspension of the supervisor, this certain person, group of persons or corporate body has a certain power over the supervisor and this might influence the supervisor’s independence.

Whereas the appointment right of the shareholders can easily be limited by the company’s articles of association, the rights of shareholders to remove a director are much stronger. A company may remove a director by an ordinary resolution prior to the end of his period in office at any time, despite anything to the contrary in the articles of association or in an agreement between him and the company, according to section 168 CA 2006 (Davies et al. 2008: 14.18; Andenas and Wooldridge 2009: 269). Special notice is required for such a resolution. According to section 169(2) the director is entitled to be heard on the resolution of removal at the meeting. After the removal a vacancy is created. If this vacancy is not filled at the meeting at which the director is removed, it may be regarded as a casual vacancy (section 168(3)).