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ACCA Applied Skills · Corporate and Business Law (Global) · Company directors

Kora plc's board needs a new director quickly. Its articles give the existing directors power to appoint additional directors to fill a casual vacancy or add to the board until the next annual general meeting. The board appoints Ms Dale under this power. What is the usual position on her tenure?

Ms Dale holds office only until the next AGM, where members must confirm her by re-election for her to continue. Board appointments made under the articles are valid but provisional, and the members retain their power to approve or remove directors.

  1. AShe serves permanently and cannot be removed by the members
  2. BShe holds office only until the next AGM, where she must stand for re-election by the members to continueCorrect
  3. CShe holds office for a fixed term of five years regardless of the articles
  4. DShe must resign immediately because only members may ever appoint directors

Explanation

Where articles allow the board to appoint, the appointment is typically provisional and the director must be confirmed by the members at the next AGM. Members can still remove her, so she is not permanent. Five years is not a fixed rule, and board appointment is valid if the articles permit it.

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