Removing Board Members - A Delicate Balance for Trade Association Boards

Because the move touches every aspect of governance, including fiduciary duties, statutory mandates, member relations, reputational risk, insurance coverage, and potential litigation, boards that act without a disciplined plan may expose the organization to controversy and legal jeopardy. This article draws on lessons learned from our work with association clients, before, during, and after they took action to remove a director. It distills practical guidance for how trade association and other cooperative boards can navigate a director-removal effort to minimize collateral damage and maximize legal defensibility.

Start With the People

Boards achieve successful outcomes when they begin with interpersonal dynamics, not procedural maneuvers. Before drafting resolutions and motions, or circulating formal notices, the board chair, executive committee, or a trusted senior officer or advisor should initiate a candid, confidential conversation with the director whose conduct triggered concern. Boards are able to resolve many seemingly intractable situations through voluntary resignation once the director understands the gravity of the issue and the likelihood of a public removal vote. We often serve as “neutral” intermediaries to help broker this dialogue. A dignified exit preserves relationships, protects the association from reputational blowback, and allows the board to focus on future priorities rather than protracted infighting.

Even when this approach fails, the groundwork laid in these initial discussions often provides valuable evidence to show that the board acted in good faith and afforded the director a fair opportunity to address the allegations. In one instance, an executive committee reached out to a director on two separate occasions. First, to alert the individual of director complaints, and later to warn that the board would recommend removal if the conduct continued. Summaries of these calls, maintained as privileged memoranda, later served as evidence of the board’s good-faith efforts to resolve the matter informally when questions arose about the process.

Check Your Bylaws

Before the board takes any formal steps, it must enlist counsel to review the state’s nonprofit corporation statute, the articles of incorporation, the bylaws, and any governing policies — particularly the code of conduct and conflict-of-interest policy. Counsel will analyze critical questions, such as who has the legal authority to remove the director; whether cause is required; what constitutes cause; what the notice, quorum, and voting thresholds are; and whether the director has a statutory or bylaw right to present a defense orally or in writing. Although most state laws modeled on the Revised Model Nonprofit Corporation Act permit the removal of sitting directors with or without cause by the constituency that elected the director, many bylaws add layers of protection, including supermajority votes or specified grounds for removal. If the director also holds an officer position (i.e., chair, secretary, treasurer), the board must observe any separate removal provisions governing officers and plan for orderly succession.

When an organization’s bylaws are silent on officer removal, counsel may need to rely on applicable nonprofit corporation statutes, which often permit removal with or without cause by a majority vote of the board. Even so, boards have found it prudent to document specific reasons — such as repeated harassment of staff and consultants — to strengthen the record and preempt claims of arbitrary action.

We have seen it hurt organizations when they have bylaws or policy provisions that impose overly restrictive requirements to remove a director. For example, one association’s bylaws permitted the board to remove a director only for non-trivial violations of the association’s code of conduct. The challenge with that provision was that it ignored the expectation for directors to demonstrate a level of engagement and professionalism beyond that of a typical member or baseline code-of-conduct requirements. A director who repeatedly fails to attend meetings or to treat others with respect, for example, may be so disruptive as to require removal in some cases, but bylaws that require a violation of a specific code of conduct may not permit removal in that situation. We also have seen boards regret that they had not included in their bylaws that a director’s failure to attend meetings can allow the board to remove the director. (Meeting attendance, of course, is critical for most directors’ ability to contribute to governance.) While most boards do not want to spend time or energy on this type of situation, they would welcome a bylaw provision providing that if a director misses a certain number of meetings without an approved reason, then the director is considered to have resigned and vacated the board seat.

Establish a Defensible Basis

Even when the governing documents allow the board to remove a director “with or without cause,” articulating a clear, documented rationale is best. By doing so, directors will satisfy their duty of care. This action will also enhance the likelihood that courts will apply the business-judgment rule and reassure skeptical members that the board is not engaging in factional politics. Frequently invoked causes for removing a director include breaches of fiduciary duty, violations of antitrust or anti-discrimination laws, harassment, misuse of association assets, failure to attend meetings, or conduct that is materially detrimental to the association’s mission. Linking the alleged misconduct to specific provisions in the code of conduct or conflict-of-interest policy transforms abstract “bad behavior” into concrete rule violations, reinforcing the legitimacy of the board’s action.

Boards have successfully cited explicit definitions of “cause,” such as dishonesty, disloyalty, or fraud when preparing formal notices to directors accused of misconduct, particularly when the director has disclosed confidential information. By linking the alleged behavior to specific bylaw language or the interests of the association, the board can avoid accusations of personality-driven or retaliatory motives. We have seen boards manage this situation successfully by explicitly identifying a series of bad behavior that evidences a pattern of undermining the association’s interests. For instance, a trade group carefully documented multiple ways in which a member-director’s conduct prejudiced the organization, including unauthorized use of proxies and threats of litigation. The board was later able to defend against the former director’s breach-of-fiduciary-duty claims by using these findings from the board minutes.

Follow a Deliberate Process

Boards often face major procedural challenges to removal efforts. The board must provide the director with written notice that specifies the meeting at which removal will be considered, details the alleged misconduct, encloses supporting documentation when feasible, and explains the director’s right to respond. Barring an imminent threat, the board should provide the director adequate time to prepare a response and to share that response with all board members. Minutes should reflect that the board spent time to deliberate in good faith by reviewing the relevant evidence, adhering to quorum and voting requirements, and complying with any recusal rules. When sensitive facts or potential litigation are involved, the board should meet in executive session, limiting attendance to voting directors, legal counsel, and any other essential advisors. Executive sessions with legal counsel present may provide attorney-client privilege protection to deliberative discussions, although this is not always guaranteed. Documentary evidence, such as emails, incident reports, and investigative findings, should be assembled and preserved in anticipation of the meeting and referenced in the minutes.

Our clients have found it effective to send detailed agendas well before the meeting, allocating specific times for board presentations, responses by the director at issue, and closed-session discussion. Conducting the meeting in executive session and using anonymous voting can help preserve confidentiality and mitigate retaliation concerns. When litigation is anticipated, the board should route investigative materials through outside counsel and promptly notify the directors’ and officers’ (D&O) carrier and, where harassment or employment issues are alleged, the employment-practices liability carrier, which can help preserve privilege and ensure proper insurance coverage.

For example, when a client board faced criticism after removing a director who had published confidential board deliberations on social media, the board followed a structured, documented process consistent with the guidance outlined here, and the board was able to successfully defend its action when the former director threatened litigation and attempted to rally members online.

Communicate Transparently and With Care

Stakeholder messaging can make or break a removal initiative. Internally, communications should be factual, neutral in tone, and disseminated only to people with a legitimate need to know. Externally, the board should generally share a concise statement that the director has stepped down from the board effective immediately, if a statement is necessary at all. The board faces risk from both over-disclosure (defamation claims) and under-disclosure (misplaced rumors). If the association’s members possess the statutory power to override the board’s decision, leadership should engage in pre-emptive outreach to explain, in broad terms, why the action was necessary to protect the association’s integrity and mission while preserving confidentiality. Where feasible, the board should collaborate with the departing director on mutually agreeable language to minimize public friction.

For external communications, some boards have limited their statements to a single sentence noting the director’s departure following a board decision taken in accordance with the governing documents. Internally, a privileged memo may be circulated to ensure that internal stakeholders understand the seriousness of the violation without risking public disclosure.

Use Legal Counsel Strategically

Counsel plays an important role in a board’s decision to remove a director and should be relied on early and broadly. Experienced legal counsel help structure voluntary exit negotiations, prepare notices and resolutions, coach directors on meeting decorum, and advise on privilege and insurance coverage. When the board has counsel present at meetings where removal is discussed, it may cloak the discussion with the attorney-client privilege protection and often discourages off-the-cuff comments that later can appear damaging in litigation. If an internal investigation precedes removal, counsel should supervise the work to maintain attorney-client privilege and attorney work-product protection. Counsel can also coordinate with insurers on panel counsel selection and coverage positions, ensuring the association does not inadvertently waive rights by providing late or incomplete notice.

By having outside counsel attend mediation sessions and removal meetings, boards can help preserve privilege and respond in real time to any legal threats, thereby defusing potential escalation. Counsel can also prepare scripted agendas and coach the chair on how to keep discussions focused and professional, ensuring the record reflects a business-oriented decision rather than personal grievances.

After-Action Review

After the dust settles, boards should conduct a follow-up discussion to identify governance gaps. Following a removal, boards may see new opportunities to revise bylaws to clarify language, streamline notice periods, incorporate remote-meeting provisions, and align voting thresholds with contemporary best practices. They may also need to expand codes of conduct to address engagement with association staff, social media misuse, or confidentiality expectations. Boards can also inoculate themselves against future crises with robust onboarding and annual training on fiduciary duties, director expectations, antitrust compliance, and harassment prevention. After experiencing a challenging removal episode, some organizations have also amended their confidentiality policies to clarify that disclosure of executive-session deliberations constitutes presumptive cause for removal. Others have instituted mandatory fiduciary-duty training for new directors within their first 60 days to reinforce expectations and prevent future issues. Demonstrating that the association learns and adapts from difficult episodes strengthens the board’s credibility and reassures the membership that leadership remains mission-focused.

Conclusion

It should never be routine for a board to remove a sitting director, but with disciplined preparation of and adherence to governing documents, and a commitment to intently managing the process, trade association boards can navigate the task without derailing the organization’s broader objectives. When the board treats the removal as one component of a holistic governance framework, the association will emerge legally fortified and better positioned to serve its members.