Measure twice, cut once: Recent case law on how to remove company directors

In any war between factions of shareholders, the first battle typically plays out in respect of board composition, as that is the central decision-making organ of a company. The procedures regarding director removals are not necessarily very complex but can turn out that way if not followed surgically. The recent unreported judgments of Jones and Others v Delport and Others (2023/082594) (28 August 2024) and Sharp and Another v Buthelezi and Others (2024/088147) (18 September 2024), in the Gauteng High Court Local and Provincial Divisions, underline the importance of this and remind us of the sage advice, “ measure twice, cut once ”. Under the Companies Act 71 of 2008 (Companies Act), the removal of a director may occur either by their fellow directors under section 71(3) or via an ordinary resolution of the company’s shareholders under section 71(1). Each of these has different requirements andconsiderations.