When a position becomes vacant on the board of directors, the competent body, either the board of directors or the shareholders, to elect or appoint a new director depends on the applicable law and the circumstances that created the vacancy.
Depending on the circumstances, the vacancy may be filled by the remaining directors, provided they meet the required quorum and the law permits them to do so, or by the shareholders. However, the rules may differ depending on how the position became vacant and the applicable rights regarding the election of directors.
Before proceeding with an election or appointment, it is therefore important to verify, in particular:
It is not necessarily mandatory to fill every vacancy immediately. However, if a vacancy prevents the company from meeting the requirements regarding the composition of its board of directors or impairs its operation, the election or appointment of a new director may become necessary.
Once the vacancy is filled, the election or appointment should be properly documented in the corporate records and the minutes book. Information reported to government authorities should also be updated, where applicable.
In summary , a vacancy on the board of directors can, depending on the circumstances, be filled by the remaining directors, provided they have the required quorum and the law permits them to do so, or by the shareholders. However, the applicable rules must be verified before proceeding with the election or appointment of a new director.