NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
removal of a director, the board of directors may appoint a new director to fill the vacancy and present such appointment to the shareholders at the next general meeting for ratification. The following persons are disqualified from being directors under the Nigerian law: • a child (ie, a person under the age of 18 years); • a person of unsound mind; • a person suspended or removed; • a person disqualified owing to insolvency, fraudulent activities, bankruptcy or unsound mind; and • a corporation other than its representative appointed to the board for a given term. Unless otherwise provided in the company’s Articles of Association, at the first annual gen - eral meeting (AGM) of the company all the direc - tors are to retire from office, and one-third of the directors ‒ or, if their number is not three or a multiple of three, then the number nearest one- third – shall retire from office at the AGM in every subsequent year. The directors to retire in every year are those who have been longest in office since their last election; however, between per - sons who became directors on the same day, those to retire are determined by lot (unless they agree among themselves). Directors retiring by rotation can be reappointed by shareholders. The process and criteria for the appointment and removal of directors would typically be contained in the Board Charter or policy on board appoint - ment, with oversight delegated to the committee responsible for governance and nominations. Unless provided in the Articles of Association or Board Charter, the removal of a director is
a statutory process and thus the provisions of CAMA would be applicable as follows. • The person(s) wishing to remove the direc - tor will issue a notice of the resolution to the company at least 28 days before the date of the meeting. • Upon receiving the notice, the company sec - retary will: (a) send a copy to the director sought to be removed; and (b) issue notice of the meeting at least 21 days before the meeting date, along with any representations made by the director. • At the meeting, the director sought to be removed will be allowed to present their case and read their representations to the mem - bers if they were received late or not received at all due to the company’s fault. • Following the representation by the direc - tor, the company shall now pass an ordinary resolution to remove the director and author - ise the secretary to file Form CAC 7A – Notice of vacation of office/removal of director within 14 days of removal with the Corporate Affairs Commission (CAC). • Record the removal in the register of direc - tors and the register of directors’ residential addresses and, if necessary, amend the regis - ter of directors’ shareholding. 4.5 Rules/Requirements Concerning Independence of Directors CAMA and the NCCG have set rules to ensure the independence of directors. The Business Facilitation Act stipulates that one-third of the board composition should be independent non- executive directors. The NCCG provides that an independent non-executive director must not possess a shareholding in the company the value of which is material to them such as to impair their independence or in excess of 0.01%
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