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Acme, Inc. is a California corporation. They have quarterly board meetings. To have a quorum, they need one of the officers to show up: the CEO, the CFO, etc.

None of the officers are willing to show up for board meetings. The majority shareholders aren't willing to take any action.

The directors have the power to fire the officers, but only at a board meeting with a quorum present.

What can the directors do?

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This answer assumes the officers are also directors - otherwise it wouldn't make sense that a quorum required one of them. It also assumes that for some reason, the non-officer directors are not the majority shareholders or appointed by the majority shareholders - which is odd but seems to be the case based on the question.

There are three answers to this question:

IF NO SHAREHOLDERS WANT TO TAKE ACTION

  1. The directors have a duty to act in the best interests of shareholders in almost all situations in CA (the exceptions aren't relevant here). If the majority shareholders aren't willing to take any action, then I presume they don't think the officer-directors' behavior is adversely impacting shareholder value, and there is no problem to solve from the director's point of view UNLESS there are minority shareholders who view this as a problem. If there are no minority shareholders who view this as a problem - then stop here, this is the answer.

IF THE FRUSTRATED DIRECTORS ARE MINORITY SHAREHOLDERS (OR APPOINTED BY THEM)

  1. In this case, if the minority shareholders do not have the power under the bylaws to force a shareholder vote or special meeting with lighter quorum rules, or reduce compensation of officers, or hire a new officer that would come to a meeting and complete the quorum, then, in their capacity as minority shareholders (not as directors) they should file a shareholder derivative suit against the CEO for breaching his or her fiduciary duty of care to the corporation. Lack of participation in board meetings is a clear cut breach of of the duty of care and the lawyer that the CEO hires will tell him or her this and most likely the suit will never need to be litigated - just filing it will get the attention needed.

IF THE FRUSTRATED DIRECTORS ARE OUTSIDE / INDEPENDENT DIRECTORS AND THERE ARE MINORITY SHAREHOLDERS WHO THINK THIS IS A PROBLEM

  1. They should make sure their attempts to uphold their own fiduciary duties to the corporation are fully documented and then they should resign. There are other things they could try - but why bother with such a dysfunctional shareholder group.

Last note: with more information about the board composition, bylaws, and role of the question-asker, it would be much easier to zero in on one solution.

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