SECTION 3: NOMINATION AND APPOINTMENT PROCESS

74 | Nominating Committee Guide Case Study 3B-4 Removal of an Independent Director This case study illustrates the procedures for removing an independent director from the Board. Context Director A is an ID of the company. He does not make constructive contributions to the Board. He questions every decision, but does not offer viable and constructive alternatives, and he is often unprepared for meetings. His relationship with other members and senior management is also strained. Q: How should the NC or the Board handle such a situation? A: The NC and Board should first critically discuss and evaluate the performance of the Director A without him being present. The Board Chairman should provide Director A with feedback on his performance including comments from fellow directors and suggestions for improvement. Director A’s subsequent performance should be monitored. If a decision is made to remove Director A from the Board, there are two scenarios. The first is when Director A is due for retirement and reelection. Here, the Board should inform Director A that he will not be nominated for reelection. It is important for the Board to engage with major shareholders so that they understand why the Board is not nominating Director A for reelection, especially if he himself wishes to seek reelection.