Home · Insights · Governance & Boards
Boards of directors: five clauses in the articles that prevent deadlock.
Most governance crises are born not of strategic disagreement, but of articles of association that fall silent at the very moment they were meant to speak. Five clauses, drafted upstream, are enough to defuse most deadlock situations.
1. A two-tier quorum
A single quorum applied to all deliberations produces two perverse effects: it paralyses routine decisions when too demanding, and weakens structuring decisions when too low. A gradation — an ordinary quorum for day-to-day management, a reinforced one for significant transactions — restores to each decision the level of legitimacy it requires.
2. A casting vote, with boundaries
Granting the chair a casting vote without delimiting its field merely displaces the deadlock rather than resolving it. The clause is stronger when it specifies the matters where it applies and those — related-party agreements, capital transactions — where it must step aside.
3. Prior information of directors
Governance litigation feeds on agendas circulated the day before and documents handed out in the meeting room. Setting a statutory deadline for circulating meeting files protects the directors as much as the validity of the deliberations themselves.
4. Alternates and vacancies
Death, resignation, lasting incapacity: the vacancy of a governing body is never foreseen by those it takes by surprise. A statutory mechanism of alternates and co-optation prevents a human situation from becoming a legal crisis.
5. A prior-mediation clause
Requiring a period of mediation before any litigation between shareholders or directors deprives no one of their rights: it gives the company a space for resolution that judicial urgency no longer allows once proceedings have begun.
Key takeaway
Articles of association are drafted for the difficult days, not for the day of signature. Each clause above is negotiated serenely at incorporation — and painfully in a crisis.
This analysis offers general guidance and does not constitute legal advice. Every situation calls for specific review — tell us about yours.
← All Insights