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Business > Boardroom Disputes

A boardroom dispute may raise a number of legal issues including the employment rights and obligations of a director, the law on director’s duties to the company and the terms of a shareholders agreement.

Boardroom Disputes

If the boardroom dispute centres on the conduct of a director, the starting point for the lawyers advising both parties is likely to be the director’s employment contract (sometimes referred to as the ‘service agreement’).  The key provisions of the employment contract are the notice entitlement and any payment in lieu of notice, garden leave and post-termination restrictions.  There will also be disciplinary procedures to be considered.  In addition to the employment issues, there may be alleged breaches of director’s duties such as taking advantage of a business opportunity in conflict with the interests of the company. In any situation where a director is leaving the company, both parties will need legal advice on the question of whether compensation may be due from one to the other. Sometimes urgent action is required which may lead to an injunction application.      


Director Shareholders

If the director is a shareholder, the question of what should happen to the director’s shareholding will need to be considered.  There may be a shareholder’s agreement under which shares may be transferred at their purchase price or subject to valuation.  Legal proceedings might be threatened and both parties will need to be carefully advised in relation to their rights, the appropriate legal procedures and the likely costs involved.  Negotiations may lead to a resolution but it will be important for both parties and their lawyers to keep in mind the business of the company and how any settlement will affect this.

Our solicitors have expertise in the employment and company law aspects of boardroom disputes and experience in relation to winding up petitions.  We are happy to advise directors and boards of directors in these matters. 

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