What should we report back if these conditions take place:

1 - The employee in question is a director?

2 - There are several directors at the same level?

Anyway, the idea would be to traverse the hierarchy one level at a time and stop the recursive part as soon as you have found the first 'IsDirector'.

with C1 as (

select employeeid, fname, lname, IsDirector, employeeid as R, IsDirector as FoundDir

from employees

where employeeid = @employeeid

union all

select C.employeeid, C.fname, C.lname, C.IsDirector, P.R, max(IsDirector) over(partition by P.R)

from C1 as P inner join employees as C on C.ReportsTo = P.employeeid

where P.FoundDir = 0

)

select *

from C1

where IsDirector = 1;

We can adapt it after you have posted DDL and sample data.