Mr Itam in his life time was the founder and Chief Executive Officer of Fank Ventures Limited, a private company duely registered in Nigeria. Before his demise, he left instructions in his will appointing his only surviving son Mr Emmanuel Itam, to take his position as Director and CEO of Fank Ventures Ltd.
He passed on in 2018, and upon reading his will, other directors of the company became aware of his intention to include his son as a member of the board of directors. Mr Emmanuel Itam (his son) has been unable to assume his role as director and CEO as other surviving directors of his late father’s company are strongly against it. Mr Emmanuel feels betrayed and confused.
Was Mr Itam right in appointing his son to take his place as director through his will?
In law, a director of a company CANNOT be appointed by a will. A deceased director loses power to influence the decisions of a company through its shareholders and directors. There are procedures laid down by law that dictates when, where and how a director can be appointed and such procedure must be strictly followed.
The directors of a company can be appointed through any of the following means;
i. In the case of first directors, by having their names registered in the Memorandum and Articles of Association of the company.
ii. In the case of subsequent directors, by shareholders in a general meeting through ordinary resolution. OR
iii. By other directors upon approval of shareholders.
This is one out of the many advantages of setting up a company as opposed to registered business names. The operations of a company are to a large extent regulated by existing laws that create them, and as such, critical decisions affecting the fate of a company are not subject to the whims of one individual irrespective of whether or not he or she is a founder of such a company.