Director of a vereniging: dismissal and mismanagement

The general meeting of members or board of supervisors may decide that a director must step down. For example, if the director fails to comply with the rules, wastes money, or signs a contract that the association cannot fulfil.

The articles of association set out how a vereniging (association) can suspend or dismiss a director. In the case of suspension, an association removes a director for a specific period. In the case of dismissal, a director may not return.

Misconduct

The board implements the vereniging’s policies. A conflict or problem may occur if board members fail to perform their duties or do so inadequately. Legally there are 2 categories: improper performance of duties and mismanagement.

Improper performance of duties is when management tasks are done poorly. For example, when a treasurer forgets to file a tax return, resulting in a vereniging being fined.

Mismanagement means very serious misconduct by directors. Examples include deliberately making mistakes in the records, using a vereniging’s funds for private matters, or signing contracts that the association cannot honour.

A board or director may be held liable for improper performance of duties and for mismanagement. In such cases, you will be personally liable for the consequences of a wrong decision. For example, you may have to pay any resulting debts out of your own pocket.

The board or a board member of either a formal or informal vereniging can be held liable. This also applies to a voluntary board or a voluntary director.

Bankruptcy due to poor management

In the event of bankruptcy, an organisation can no longer pay its debts. In that case, the court appoints a trustee to sort out the financial affairs. The trustee may, for example, sell the building, computers, and other assets. With the proceeds from these sales, the trustee pays themselves and settles as much of the debt as possible. The trustee also investigates the causes of the bankruptcy.

If a vereniging is going bankrupt because the board has not performed its duties properly, the trustee must prove this in court. The court may then hold the board members personally liable. This means they must pay for any mistakes or debts out of their own pockets.