What is the consequence for a director's persistent default in fulfilling duties?

The consequence for a persistent default by a director in fulfilling their duties can result in potential disqualification. Directors have a fiduciary duty to act in the best interests of the company, and when they fail to perform these duties consistently, particularly in a manner that endangers the company's integrity or operations, legal mechanisms come into play to protect the interests of shareholders, employees, and other stakeholders.

Disqualification serves as a crucial deterrent against inadequate governance and ensures that individuals who may not be capable of serving effectively do not continue to hold such positions. This potential disqualification is typically pursued through regulatory bodies or legal proceedings, reflecting a serious concern about the director's ability to perform their responsibilities adequately.

In contrast, immediate removal is not typically the first step taken unless the defaults are extraordinarily severe. Warnings from the Secretary of State or similar regulatory entities often come after disqualification has been considered, and increased voting rights would not relate to the consequence of a director's failing to meet their duties. Thus, the option regarding potential disqualification aptly describes the careful balance of accountability and protection within corporate governance.