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Board Authority and Shareholder Approval: A Case Study in Director Removal and Invalid Bylaw Amendments
Under Section 706(a) of the New York Business Corporation Law (“BCL”), a director may be removed for cause either by shareholder vote or, where authorized by shareholder-adopted bylaws, by action of the board. In addition, where a corporation’s governing bylaws leave “cause” undefined, the board retains broad discretion to determine whether sufficient grounds for removal exist, subject to the business judgment rule.

Jeffrey Haber
2 days ago7 min read
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