SCENARIO 4: AquaGrid PLC, a regional water utility, is considering a major infrastructure upgrade. The board of directors is split. Director A wants the cheapest option to maximize short-term shareholder dividends. Director B wants a more expensive, eco-friendly option, arguing it benefits the local community and ensures long-term sustainability, even if it reduces dividends this year.
Under Section 172 of the Companies Act 2006 (Duty to promote the success of the company), which approach is legally correct?
ACCA · Question 57 · Corporate and Business Law
SCENARIO 4: AquaGrid PLC, a regional water utility, is considering a major infrastructure upgrade. The board of directors is split. Director A wants the cheapest option to maximize short-term shareholder dividends. Director B wants a more expensive, eco-friendly option.
The shareholders are unhappy with Director A's performance and wish to remove him from the board before his term expires. What is the statutory procedure to remove a director under Section 168 of the Companies Act 2006?
Answer options:
A special resolution passed at a general meeting, requiring 14 days' notice.
An ordinary resolution passed at a general meeting, requiring 28 days' special notice.
A board resolution passed by a majority of the other directors.
A written resolution signed by 51% of the shareholders.
60 questions · hints · full answers · grading
Expert