Can an MD make decisions with any kind of board meeting?

Question

I'm a director of a small company. I have been rewarded a 10% stake in the Company. The MD has 60%, Finance 20% and Another 10%.

I joined the company and helped recover it from the brink of closure to its current healthy state. We moved from Domestic Computers to Business Networks (my area of expertise).

The MD then bought the building for himself, leased it to the company and increased the lease fee's to cover the mortgage. I would have expected some kind of board meeting to tell everyone what was happening and I would have been more than happy with that. We had no formal meetings or minutes entered into the records.

The Finance directory was involved in contacting the previous landlord and involved in organizing the deal. I asked the MD about it and with a shrug of the shoulder was told he didn't think I'd be interested or had the funds to invest..... 

It would have been nice to have been asked, I had the finances to do so. As you can imagine moral is pretty low.  I have a very good relationship with the company and if i left thinks would fall apart, not because I'm good but because I'm the one with skills in this discipline (Computer Networking). 
The company has been through hard times. We are all on minimum wage and more than happy to do so knowing that things will improve. BUT as the rent has gone up the wages won't change and the MD is going to charge the company for all internal improvement work to the business. Which has put a strain on cash-flow.
He is paying for the external extension work on his mortgage and of course that's' included in the lease fee's.
Can this happen without any input or objection from me as a Director? If the company goes under as a result of the strain on finance's were do I stand?

All spammers will and have been reported!

Judy · Accepted Answer

While the MD should communicate to the rest of the directors, if he has 60% of the company it doesn't really matter how the rest of you think.  If he's messing with the financial structure though and heading toward driving the company down, why do the rest of you stay?

flingebunt · Answer

This could constitute corporate fraud. 

Most people who own their own business's are arseholes. They can't get along with other people, so they work 80+ hours a week for less money so they can boss others around.

You need to convince this guy certain things need to be done to improve the company.

Have a friendly meeting, raise it as an issue.

Go for the "yes" approach.

You know I have help you fix your company (they should say yes, if they say "no" then your only option is the door)

I want to help improve it, make it better, make you more money (they should say, of course)

I want to talk about some issues that are holding you back.

Talk about cash flow, staff moral etc. Talk about it quietly, don't even expect an answer. If he argues back, ignore it. 

Let him think about it, he values money and is likely to go away, and come back and agree with much of what you say.

Also raise the issues of corporate fraud. Not as an accusation, but as an issue about how to make sure nothing is done incorrectly. For example, propose alternatives.

Anonymous · Answer

Corporations are required by law to hold board meetings and keep minutes of those meetings.
And THAT is where such decisions are to be made.

It doesn't matter whether he's an MD or not.
That's completely irrelevant.

He's assuming that it's ok because he holds the majority of stock.
And while he can overrule the rest of you, it's still illegal.

Read the corporation's by laws.
And if you don't know what that means or where to find them, then get the hell out.

finephilly · Answer

He's ******* clueless and so are you.

Can an MD make decisions with any kind of board meeting?

4 Answers