Yes, like any other directors of a company, a nominee director can be removed, subject to the procedure provided for in the constitution of the company or under any applicable law, which normally would be upon the instance of the appointing party-the nominator-no longer needing a nominee director to represent the interest of that party-or in the instance of a nominee director’s breach of his duties.
The process of removing a director, including a nominee director, is usually governed by company law in most jurisdictions, including Singapore. For instance, Singapore’s Companies Act provides that a director can be removed upon an ordinary resolution passed at a general meeting of shareholders. The constitution of the company can also provide for rules and procedures concerning such removal.
A nominee director could be removed on several grounds:
- Change in requirement of Representation: It may occur that the nominator perceives the nominee director to be no longer needed or intends to appoint another better representative of his interest.
- Breach of any Duty: The nominee director will be removed on the grounds of failing to act in the best interest of the company or if any breach of confidentiality occurs, among other cases of breach of fiduciary duty, or any other regulatories.
- Inactivity or Misconduct: A nominee director can be removed in cases of inactivity, negligence, or misconduct which has caused or may cause harm to the company.
It should, however be noted that even though removed, a nominee director by One IBC is liable for the actions he had performed during his tenure and he needs to ensure proper transition, especially in matters of compliance or company records.