An alternate director is a person who is appointed by a director of a company to act in that director’s stead when the appointing director is either out of Ghana or is for some reason, unable to perform his/her duties as director. The duration of this appointment cannot exceed six months and automatically expires when the duration of the appointment expires.
Process for appointment
The person to be appointed as alternate director must be approved by a resolution of the board of directors.
The appointing director writes an appointment letter which will be signed by both the appointor (substantive director) and appointee (alternate director).
The written appointment is lodged with the company.
Powers and Qualification of an Alternate Director
An alternate director, although appointed by a director, is not an agent of that director but rather an officer of the company. The alternate director is a full director of the company and can perform any duty performed by the substantive director. However the alternate director is not counted as a director for purposes of quorums for meetings. The alternate director can also not attend or vote at a meeting where the appointor is present. He/she can also not appoint an alternate director (delagatus non potest delegare). He/she may be paid with the appointing director’s remuneration if the company’s constitution provides for this but where no provision is made, no remuneration shall be given.
To be appointed as an alternate director, a person must meet the age and other requirements which must be met by any director of a company. The alternate director is however exempted from meeting any shareholding requirement which may be required by the company’s constitution due to the temporary nature of the appointment.
A person who is already a director of the company may be appointed as alternate director. In that event, the director shall have an additional vote for the director who is being represented.
Termination of of Alternate Directorship
At the expiration of the period for which the appointment was made, (b)
If the appointor gives written notice to that effect to the company,
If the appointor ceases for any reason to be a director, or
If the alternate director resigns by notice in writing to the company
Sources – Companies Act 2019 (Act 992) section 181, Corporate Governance Directive 2018
Author – Ewoenam Kukah