Understanding grounds for removing a board member (with sample letter)
For the past five years, the board of directors' turnover rate hovered at 8%. The reality of the modern board is that directors don’t just come but also go. They might choose to leave of their own accord, but they also might need to be removed or replaced, which is why understanding the grounds for removing a board member is critical.
Board composition is critical to board success, and assessing the board's makeup and actively refreshing it by replacing some of its members can help ensure its success. Every director influences how the board executes its duties and serves the company's stakeholders, bringing personal experience and a unique perspective to the table. Even a slight adjustment to the composition of a board can have a big — and often positive — impact. There are several situations that may call for a board refresh or the removal of one director in particular, and a number of options as to how to do it.
Here, we explain:
- The most common reasons for removing a board member
- Legal grounds for removing a board member
- How to remove a board member step by step
- A sample letter for removing a board member
- Alternatives to removal
- Tools to help manage board succession
What are the most common reasons for removing a board member?
A board may decide to remove a member if they are ineffective or breach their fiduciary duty somehow. This is distinct from when a member retires or leaves the board to pursue other personal or professional opportunities. While removing a board member isn’t common, it’s not unheard of. If a board decides to remove a director, it could be for the following reasons.
Director performance and behavior
With power comes responsibility. Sadly, not all directors can perform at a level that meets the board’s and the organization’s standards. Misconduct and unethical behavior are obvious reasons to consider removing or replacing a director. Diminished performance, an inability to operate as expected, and/or the lack of time that's needed to serve effectively can also lead to a director's removal.
As a result of its 2024 Annual Corporate Directors Survey, PwC found that 49% of directors believed that someone on their board should be replaced, while 25% said multiple directors should be replaced. Whether said board member is ill-prepared for meetings, lacks the necessary expertise, is aging out of the role, or is overstepping boundaries — all of which were cited as primary factors affecting the need for their removal — directors felt the board would be better served by releasing a member from their duties.
At the same time, the PWC survey revealed that many directors have “concerns about political divisiveness, immigration policy, and economic inequality," but only half of directors say their fellow board members are willing to confront these issues. If a director is unable or unwilling to produce the outcomes the board and the organization are looking for, companies often have no choice but to seek a replacement.
The growing need for diversity
Board diversity remains a hot topic among companies at all levels, but according to Deloitte's 2024 Women in the Boardroom Report, "Without greater focus and action, gender parity in the boardroom is unlikely to be achieved before 2038." For example, Deloitte reported that women hold less than one-quarter of the world’s board seats, and the number of women holding a seat has only risen by 3.6% since 2022.
People of color are also underrepresented on boards. While Black directors increasingly joined boards from 2020 to 2022, Hispanic/Latino(a) representation on Fortune 100 boards has stagnated since 2004. Recent growth in Hispanic/Latino board members is remarkable, in part, because of the low representation to start. The need for more diversity on corporate boards is a driving force behind the decision to replace a board member.
“The business case for diversity is clear: companies with more diverse boards have shown that they tend to perform better financially. Despite that, it is clear that a tangible increase in momentum is needed to reach gender parity in the boardroom. With women currently still underrepresented on company boards globally, that step change in momentum will require organizations and investors to do more to realize the benefits that diverse boards can bring,” says Anna Marks, Deloitte Global Chair.
To diversify a board, though, there needs to be space for new members. This may require the board to secure a director’s resignation.
Director tenure
An ongoing focus for investors and shareholder activists, director tenures have their benefits and their downfalls. While a long tenure can lead to directors’ institutional knowledge, it can also be an issue if a board member lacks industry or technological expertise and if the board needs to diversify its membership.
The Harvard Law School Forum on Corporate Governance reports that the number of boards implementing term limits is growing, albeit slowly. Approximately 8% of S&P 500 boards and 5% of Russell 3000 boards instituted a term limit in 2023. At the same time, “the decline in sitting director tenure could be due to various factors other than retirement, including companies diversifying their board and adding new directors.”
Non-participation or absenteeism
Board members actively oversee the organization’s governance and strategic direction. Doing so effectively requires time, attention and the unique expertise of every board member. Chronic non-participation — missing meetings, disengaging or not contributing — can undermine the board’s effectiveness and mission.
This can be grounds for removing a board member if they are repeatedly absent without explanation or prior notice, attend meetings but fail to prepare for or participate in them, neglect key duties or ignore communications. Deciding to remove them can also be a better decision for board culture, as one member falling short can disempower the entire board.
Moving on
There are times when a company may find that it isn’t necessary to remove a director because the board member resigns voluntarily. Whether due to the inability to keep up with board demands or the company’s values and interests clash with their own, a board member may have no choice but to take their leave. This opens up an opportunity to address some of the board composition concerns mentioned above, including diversifying board membership and inviting younger directors to accept a seat at the table.
Legal grounds for removing a board member
Removing a board member can be a sound choice for internal politics or other interpersonal reasons. However, there are also situations where removing a director from their post becomes legally necessary. These include:
Breach of fiduciary duty
Board members are legally bound to uphold three core fiduciary duties: duty of care, duty of loyalty and duty of obedience. Together, these principles compel board directors to make informed decisions, exercise reasonable caution, place the organization’s and stakeholders’ interests above their own and keep the organization compliant.
According to the Corporate Governance Institute, “In times of high pressure in the business, it is vital to ensure such duties and obligations are being followed and that all directors are compliant.”
If a director breaches these duties by, for example, approving reckless financial decisions or disregarding legal compliance, you may consider removing them.
Criminal behavior or misconduct
If a board member is convicted of a crime, particularly fraud or theft, they can or should be removed to protect the organization’s reputation and legal standing. Even allegations of serious misconduct could trigger a suspension or internal investigation, especially if the behavior threatens donor trust or public confidence.
For example, Enron Chairman Kenneth Lay, along with CEO Jeff Skilling, appraised its holdings based on expected value. Because energy values weren’t concrete, Enron overvalued its holdings and misreported gains. While Lay ultimately resigned, a scenario like this could be considered grounds for removal.
Conflict of Interest
Given that many executives hold a C-suite-level position with a separate organization while serving on a board of directors for another company, the possibility of a conflict of interest is relatively high. A director may have a vested interest in a firm that makes a competing product or prior knowledge of an upcoming merger or acquisition that could affect how the board votes on a key issue.
It’s vital that boards introduce a conflict-of-interest policy, which the National Council of Nonprofits explains should “require those with a conflict (or who think they may have a conflict) to disclose the conflict/potential conflict,” and “prohibit interested board members from voting on any matter in which there is a conflict.” Even with such a policy, potential conflicts related to personal financial interests, family ties, ethics or conduct might arise. If it becomes clear that a director isn’t voting with the company in mind, the board must be committed to putting its interests first.
Violation of bylaws or policies
Boards are ultimately governed by the organization’s bylaws or policies, which outline board structure, roles, meeting frequency, voting procedures and more. The board may also adopt additional policies like codes of conduct, confidentiality agreements, whistleblower policies and DEI policies.
Violations of these internal rules can compromise the organization’s safety, integrity and legal standing. Removal may be on the table if a board member breaks the bylaws by leaking confidential information, bullying other members, ignoring voting procedures, overstepping their authority or failing to meet expectations.
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Discover moreHow to remove a board member
While it should be considered a last resort, impeachment can remove a member from the board through a vote. Here’s how you can enact the process should you need to:
- Review your bylaws and state laws: Every board’s bylaws should outline a course of action for petitioning for the impeachment of a director who has egregiously abused their position and is causing the organization, its shareholders or its stakeholders harm. Use your bylaws, but also consult state laws and legal counsel to ensure you truly have grounds for removing a board member.
- Document the grounds for removal: Maintain clear, factual records outlining why you’re considering removal. Include specific incidents, dates and documents — such as emails — to support the case.
- Attempt resolution (if appropriate): Consider whether a conversation could solve the problem. You can address a lack of attendance or non-participation, for example, through a private discussion, mediation or a performance improvement plan. However, more serious misconduct may require immediate removal.
- Provide written notice: Send a letter to the board member explaining that the board is considering their removal, the reasons for potential removal and the date, time and location of the vote. Outline whether they can speak or respond before the vote occurs.
- Hold a formal vote: At the meeting, allow for discussion and make time for the board member to respond, if appropriate. Take a vote according to your bylaws, looking for either a majority or a supermajority—record key points from the discussion and the vote in the meeting minutes.
- Notify and update your records: If the vote passes, notify the board member of the decision in writing (see sample below). Update organizational documents, such as your board roster, state filings or bank authorizations. Depending on the reason for removal, consider whether you must develop a plan to communicate internally or with the public.
- Plan the transition: The nom/gov committee can then fill the vacant position through an appointment, election by the board members or waiting until the next election cycle.
Sample letter for removing a board member
As mentioned above, you must notify the member after you’ve voted to remove them. Here’s a sample letter you can use or adapt to your board:
[Your organization’s letterhead]
[Date]
[Board member's name]
[Address]
[City, State ZIP]
Subject: Notice of removal from the board of directors
Dear [Board member's name],
After careful consideration and pursuant to the authority granted by our bylaws and applicable state law, this letter is to formally notify you that, effective [effective date], you have been removed from the Board of Directors of [Organization name].
This decision was made by a vote of the Board during a duly called meeting held on [meeting date], in accordance with [cite the relevant article and section of your bylaws, e.g., "Article IV, Section 7: Removal of Directors"].
The Board made this decision based on the following grounds: [e.g., chronic absence from board meetings without prior notice, failure to fulfill fiduciary obligations, violation of organizational policies, etc.]
We acknowledge your contributions to the organization during your tenure and thank you for your time and service. Should you have any questions about this decision or wish to discuss it further, you may contact [Board Chair] at [contact information].
We will take the necessary administrative steps to update our records, and we ask that you return any organizational materials, including board documents or property, by [return date].
Sincerely,
[Your Name]
Chair, Board of directors
[Organization name]
[Email address]
[Phone number]
Alternatives to board member removal
Voluntary resignation aside, there are several ways in which a company can remove a director from the board.
Leave of absence
One approach is to offer the board member a leave of absence. This is a good choice if the director has been underperforming due to a personal issue like a family conflict or a health concern. Implementing a leave of absence allows the director to address urgent matters and, if successful at mitigating them, return to the board with renewed focus at a later date.
Should a company choose to take this tack, business resource Nonprofit Hub recommends that the board implement a policy that outlines how it intends to treat leaves of absence, how long they should last, what powers, if any, the director will have while on leave; and how their temporary departure will affect quorum numbers — the minimum number of board members needed for a vote — as a board with no quorum will need to adjourn its meetings until the director vacancy can be addressed. “Before granting a leave, have these discussions with both the board and board member,” wrote Lincoln Arneal, senior editor at Nonprofit Hub.
Term limits
Implementing a term limit offers more control over board composition in general and may come in handy should a board feel the need to cycle out one of its members. It also has its benefits as a preventative measure, as it can encourage directors to remain passionate and engaged in their work for the board, thus decreasing the odds that they will need to be removed later on.
Term limits can vary dramatically from one company to the next. In an article on board best practices, management consulting firm McKinsey & Company pointed out that some organizations invite non-executive directors to serve on the board for a full 10 years, while others limit membership to six or seven years. It isn’t the length of the term that matters so much as the fact that a limit has been placed and members know that, at some point or another, they will be rotated out.
As noted by nonprofit resource GuideStar, serving on a board can be grueling work, and after multiple terms, a director can grow weary and even apathetic. “Automatically providing for an ending time frame allows the effort to stay focused during the term(s) of service [and] then ensures there is time away to recharge the batteries,” the organization wrote. “It also ensures an outside perspective is gained prior to possibly returning to board service later.”
Removing a board member isn’t ideal. But it can be seamless.
Difficult though it may be, removing a board member can be an unavoidable by-product of building and maintaining an effective board of directors. Understanding why removal might be necessary and making prudent choices regarding how the director leaves the board can assist in keeping operations running smoothly and preserving vital director relationships.
However, even if you have grounds for removing a board member, replacing them can be difficult. The nom/gov committee may work overtime to identify, appoint and train a candidate, or the board may operate one member short until the next election cycle.
In either case, the board will benefit from smarter governance. Diligent Boards, part of the Diligent One Platform, streamlines the entire lifecycle of the board of directors. From identifying candidates to managing succession planning to orientation and day-to-day operations, Diligent Boards simplifies it all with secure, integrated and purpose-built tools.
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FAQs
Can a board member be removed without cause?
Yes, a board member can be removed without cause, but only if the organization’s bylaws and state law explicitly allow it. Some states require that the cause be documented unless the bylaws specifically permit removal “without cause.” Organizations should review their governing documents and consult legal counsel before taking action. Clear removal procedures help prevent disputes and maintain board integrity.
How do I remove a toxic board member?
To remove a toxic board member, follow a structured, legally compliant process:
- Review your bylaws and state laws on board removal.
- Document problematic behavior (e.g., bullying, insubordination, policy violations).
- Attempt an informal resolution or warning.
- Provide the board member with written notice of the proposed removal.
- Hold a formal board vote, per your bylaws.
- Follow up with an official written removal letter and update records.
Always act with fairness and professionalism, and consult legal counsel when needed.
Who has the authority to remove a board member?
The authority to remove a board member depends on your organization’s bylaws and legal structure. In most cases, the board of directors can vote to remove one of its members. However, members (not the board) may hold that authority in membership organizations or nonprofits with elected boards. Always check your governing documents to confirm who has removal power and the voting requirements.
What happens after a board member is removed?
After removal, the board must:
- Document the decision in the official meeting minutes
- Notify the removed member in writing
- Update records (e.g., with the state, banks, internal systems)
- Determine how the vacancy will be filled—by appointment, special election, or waiting until the next term
- Consider communicating with staff or stakeholders if the situation is public or high-conflict
It’s crucial to handle the transition professionally and with confidentiality.
Does the board need a unanimous vote to remove someone?
No, a unanimous vote is rarely required to remove a board member. Most bylaws specify a majority or supermajority vote (e.g., two-thirds of board members). The voting threshold — and whether removal can occur “with or without cause” — should be detailed in your bylaws and must comply with state law. Always verify voting requirements before taking formal action.
Related resources
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Fiduciary duty 101: Definitions, breaches, and prevention tips
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Board succession planning: Identifying & developing future board leaders
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