Tentants as directors

olisun

Morning,

Can tenants join the board of directors and if yes, in what capacity? I mean limitations.

If they can't, have the current directors broken any rules?

One of the director on the board is a tenant and I am not sure to what extend the director is involved in the decision making.

Can that tenant (director) also attend AGM meetings, which are usually reserved for lease/share holders?

FYI there is nothing mentioned in the AOA or Memorandum or the lease regarding appoint of directors.

GDB2222

Anybody can be a director of almost any company. 

theartfullodger

What do the articles of association say about tenTants being directors?  Can't read them from here...

Directors of what? Freehold company?  Management company?  Which country - NI, Wales etc? 

What does the existing tenant/director say about this? Was he originally a leaseholder who sold and stayed as tenant?

Bookworm105

An AGM is a presentation of the company position by its management team (including directors) to its shareholders.
If there is to be any meaning to the AGM then directors need to be present to field questions

who can vote is a matter for the AoA but of course a director can simultaneously be a shareholder 

DullGreyGuy

olisun said:

Can tenants join the board of directors and if yes, in what capacity? I mean limitations.

If they can't, have the current directors broken any rules?

One of the director on the board is a tenant and I am not sure to what extend the director is involved in the decision making.

Can that tenant (director) also attend AGM meetings, which are usually reserved for lease/share holders?

FYI there is nothing mentioned in the AOA or Memorandum or the lease regarding appoint of directors.

Which company? The freeholder of a building?

Assuming they meet the basic requirements of being a director in the UK then they can be a director of any company here. Unless your company operates in a highly regulated industry there is no legal requirement for a CFO to hold finance qualification or a COO to be a lean 6 sigma expert or anything else. They just need to be competent at whatever role they apply for and are awarded. 

If it is for the freeholder of a building or right to manage company or such then in most cases they are unpaid roles but if the tenant wants to be director of bin emptying and do that every week for free then there's no issues. 

The Articles of Association ideally would set out certain rules around voting etc at the AGM but the general idea is for the shareholders to receive information and ask questions of the directors and potentially vote on a number of matters. Many AGMs are attended by people that are neither directors nor shareholders and thats perfectly fine too until it comes to votes in which case typically it's just the shareholders that can vote. It's natural also that some people are double hatted so will be both a director and a shareholder so will present/answer questions but then get to vote whereas the non-shareholder director wouldn't. 

olisun

theartfullodger said:

What do the articles of association say about tenTants being directors?  Can't read them from here...

Directors of what? Freehold company?  Management company?  Which country - NI, Wales etc? 

What does the existing tenant/director say about this? Was he originally a leaseholder who sold and stayed as tenant?

The AOA doesn't have anything mentioned about the directors appointments and referes to something "Table A"

Directors of the management company (RMC)

The tenant/director has been a tenant for over 7 years and has been appointed before I moved in.

olisun

Bookworm105 said:

An AGM is a presentation of the company position by its management team (including directors) to its shareholders.
If there is to be any meaning to the AGM then directors need to be present to field questions

who can vote is a matter for the AoA but of course a director can simultaneously be a shareholder 

I am trying to find out how deep that the tenant/director get involved in decision making.

olisun

DullGreyGuy said:

olisun said:

Can tenants join the board of directors and if yes, in what capacity? I mean limitations.

If they can't, have the current directors broken any rules?

One of the director on the board is a tenant and I am not sure to what extend the director is involved in the decision making.

Can that tenant (director) also attend AGM meetings, which are usually reserved for lease/share holders?

FYI there is nothing mentioned in the AOA or Memorandum or the lease regarding appoint of directors.

Which company? The freeholder of a building?

Assuming they meet the basic requirements of being a director in the UK then they can be a director of any company here. Unless your company operates in a highly regulated industry there is no legal requirement for a CFO to hold finance qualification or a COO to be a lean 6 sigma expert or anything else. They just need to be competent at whatever role they apply for and are awarded. 

If it is for the freeholder of a building or right to manage company or such then in most cases they are unpaid roles but if the tenant wants to be director of bin emptying and do that every week for free then there's no issues. 

The Articles of Association ideally would set out certain rules around voting etc at the AGM but the general idea is for the shareholders to receive information and ask questions of the directors and potentially vote on a number of matters. Many AGMs are attended by people that are neither directors nor shareholders and thats perfectly fine too until it comes to votes in which case typically it's just the shareholders that can vote. It's natural also that some people are double hatted so will be both a director and a shareholder so will present/answer questions but then get to vote whereas the non-shareholder director wouldn't. 

My only concern is that whether the tenant/director can get involved in decision making, which effects all the leaseholders.

While this director may not be able to vote, but they can certainly influence decisions, which may or may not have a negative outcome for the shareholders.

Bookworm105

olisun said:

Bookworm105 said:

An AGM is a presentation of the company position by its management team (including directors) to its shareholders.
If there is to be any meaning to the AGM then directors need to be present to field questions

who can vote is a matter for the AoA but of course a director can simultaneously be a shareholder 

I am trying to find out how deep that the tenant/director get involved in decision making.

if there is no explicit instruction on how a director can be appointed (and removed) then the company cannot have directors as that is impossible! "Table A" may be a matrix setting out such procedures.

seems to me you have not yet found your way to the full set of rules governing the company. 
As I said, a company is operated by its management and they (ultimately) are put in place by its shareholders. Is shareholders so not like the actions of management then the shareholders vote to replace the managers. It would be an exceptional company where the shareholders vote on every action of the company, rather than leaving such delegated to duly appointed management.

If you have a particular vendetta against an individual person then the obvious mechanism is to get the rest of the shareholders to act collectively and sort it out. If not enough of them share your concern, then so be it, move on with your life.

gm0

Situation affects this.  Shared house with 3 and no agent appointed is one delicate neighbour relations scenario.  Blocks of flats with 20-100 leases and an MA being appointed and managed by RTM or share of freehold is another. 

The following is more in the spirit of the latter.

Your concern may be legitimate - too stingy and too profligate (costly) being the usual areas where views diverge sharply in a RTM or share of freehold community.  Doesn't matter what it it is.

Your search for a governance route to restrict or disqualify as a path forward is ill founded

Even if they are not a leaseholder and so not a share owner/register member with an AoA vote - it would in fact be utterly trivial for their landlord (the actual leaseholder if they are happy with the arrangement and being actively represented - to simply write an email or letter and appoint them as their "proxy"  vote.  

Proxy votes of people not individually named on the qualifying lease.  Are a thing with many articles and Ltds permitted because of catering for incapacity, trustees, overseas owners, preferences, and company ownerships of leases.  So most likely nothing you can do to prevent them already being a voter.  Or if not a voter - from becoming a voting member (as proxy) via a simple exchange of emails between them and their voting landlord (if that person agrees to it).  Other members via being leaseholders don't get a say on who that member appoints or chooses not to for a given AGM decision, or ongoing.

Day to day influence they wield already via being a director as discussed upthread.  Given articles are silent.  The appointment of the person as a director (some time ago) at an AGM may well be legitimate - albeit not documented thoroughly - as is often the case.  It could easily happen.  Volunteers in short supply.  Someone resident who is willing to serve.

Most larger sites don't hold constant meetings and votes and leave the directors to it day to day prioritising a managing agent.  Splitting day to day tasks.  And meeting occasionally.   No obligation for those to be announced, face to face or public meetings.  Nor minuted to all residents.  They can if they want.  You can't force it.  Few directors report back constantly at micro detail about who has whinged about what and discussions with the MA.  Requests to do so in the name of transparency - but in fact to enable obstructive micro management at your leisure absent real involvement.  Will deservedly receive a very frosty reception and very little co-operation.

As to the involvement of this "volunteer" in a rental - their motivations could be purely helpful and neighbourly, somewhat hobby based, or more sinister - financial graft.   Influence may be considerable on the day to day running of the estate depending on how active and energetic other directors are.   And the way to influence outcomes and/or reduce said influence is to get involved and play a part.

Consider how this needed function is to be fulfilled if you succeed - MA's become lazy and exploitative if directors churn often or are reluctant to continue (old/ill/leaving soon) yet can't find a hand off destination). 

Your real world recourses are

a) get involved yourself - get co-opted by current board, and then elected (or elected if they demur) as a director at AGM, participate and push your point of view actively.  Taking on a share of the work. 

b) Sand in the gears - harrass them sufficiently using the articles to appeal policy decisions, calling extraordinary AGMs for specific decisions, or putting motions in to AGMs - insisting on full vote of shareholders - time after time - just generating bureaucracy and hassle and work and obstruction for the current directors until they get fed up and walk away - all the while damaging broader neighbourly relations with your antics 

Leaving you collectively with a need to find new directors.  At which point many neighbours will be expecting route a). 

You broke it. You can fix it. 

And many would not be remotely interested in volunteering and then putting up with a back seat driver while taking it on themselves. After watching it play out via b).

So a).

Non-option c) - Lawyering up is a good way to cost yourself and your fellow owners money that could have been spent on something useful.  Taking legal advice as the directors of the Ltd is the first reaction to most disputes or legal letters received. Which is a cost of the company not of the directors and finds its way back to owners i.e. the leaseholders.  Best not.  Reserved for the most egregious examples - actual corruption and stealing.

DullGreyGuy

olisun said:

DullGreyGuy said:

olisun said:

Can tenants join the board of directors and if yes, in what capacity? I mean limitations.

If they can't, have the current directors broken any rules?

One of the director on the board is a tenant and I am not sure to what extend the director is involved in the decision making.

Can that tenant (director) also attend AGM meetings, which are usually reserved for lease/share holders?

FYI there is nothing mentioned in the AOA or Memorandum or the lease regarding appoint of directors.

Which company? The freeholder of a building?

Assuming they meet the basic requirements of being a director in the UK then they can be a director of any company here. Unless your company operates in a highly regulated industry there is no legal requirement for a CFO to hold finance qualification or a COO to be a lean 6 sigma expert or anything else. They just need to be competent at whatever role they apply for and are awarded. 

If it is for the freeholder of a building or right to manage company or such then in most cases they are unpaid roles but if the tenant wants to be director of bin emptying and do that every week for free then there's no issues. 

The Articles of Association ideally would set out certain rules around voting etc at the AGM but the general idea is for the shareholders to receive information and ask questions of the directors and potentially vote on a number of matters. Many AGMs are attended by people that are neither directors nor shareholders and thats perfectly fine too until it comes to votes in which case typically it's just the shareholders that can vote. It's natural also that some people are double hatted so will be both a director and a shareholder so will present/answer questions but then get to vote whereas the non-shareholder director wouldn't. 

My only concern is that whether the tenant/director can get involved in decision making, which effects all the leaseholders.

While this director may not be able to vote, but they can certainly influence decisions, which may or may not have a negative outcome for the shareholders.

Again comes down to what the AoA says the directors can do on their own and what has to be put to either a directors meeting or shareholders/members meeting. 

It's no different to any other company, shareholders may not like a directors decision, hence people shouldn't be appointed as directors lightly.  If you use the model articles for RTM Company you also need to be careful as they dont give members/shareholders the right to vote out directors