Overview
IntroductionThe position of a Non-Executive Director (NED) on the Board is likened to that of a consultant, providing independent services/ oversight and strategic direction to executive management in the Company. However, the recent decision of the Court of Appeal in Odu’a Investment Company Limited v. Mrs. Bolanle Oguntola raises critical concerns about the legal position of NEDs, by challenging the traditional status of NEDs and classifying them as employees. In this case, the Court affirmed that the National Industrial Court (NIC) has jurisdiction to adjudicate disputes between a NED and the Company, on the grounds that a NED qualifies as an employee of the company.
This decision represents a fundamental change in Corporate Governance jurisprudence globally, and in Nigeria, as it potentially re-characterises the status of Non-Executive Directors beyond that envisaged under the Nigerian Code of Corporate Governance, 2018, and good corporate governance practices. This paper reviews the legal status of Non-Executive Directors (NEDs), highlighting their rights and responsibilities, as well as the court with jurisdiction in disputes between a company and its NEDs. It also analyses the procedure for removing directors under Section 288 of the Companies and Allied Matters Act (CAMA), 2020, examining key statutory requirements such as shareholder resolutions, special notices, and directors' rights to respond, as addressed in the case. Additionally, the review references First Bank of Nigeria v.
Longe (2015), emphasising the importance of strict compliance with legal procedures in the removal of directors.
