How to call a Board Meeting?

Introduction

As we all know, in a company some decisions are required to be made either by the members of the company or the directors of the company. When some special or important decisions are to be formed, the Board of Directors (BOD) is mandated to conduct a board meeting and discuss the matter in the meeting. So, board meeting being an important component in a company, let us discuss in detail as to “How to call a board meeting”?

Under the Companies Act 2013, certain rules and regulations are given to be followed by the company and the board. Let us know what all is being regulated.

Section 173 of the Companies Act

The Company, in order to call a board meeting requires to ensure some of the things that must be present before starting to call a board meeting. The essentials to start a board meeting are:-

Minimum No. of Board Meetings

So, in the case of a Public Company, the first meeting of the Board of Directors shall be conducted within 30 days of the company’s incorporation. Also, not more than 120 days shall be passed between two consecutive meetings. All in all, a company should conduct 4 board meetings in one financial year as asked under the Companies Act 2013.

However, in the case of Section 8 Company, Board of Directors (BOD) of companies shall hold at least 1 board meeting every 6 calendar months. If we talk about small company or one person company, at least two meetings must be conducted one in each half of the financial year. And the gap between the two meetings must be at least 90 days. Where a meeting is called at a short notice, at least one independent director must be present in the meeting.

Notice

Before calling a board meeting, a notice in writing must be issued which shall be circulated to every director of the company. Board Meeting is to be called by giving not less than seven days’ notice to directors of the company. As said under the Companies Act, notice shall be delivered by hand or by electronic means. Where at short notice meeting is called, independent director shall be present in the meeting.

Procedure for Convening a Board Meeting

The procedure for convening a board meeting is given under Rule 3 of the Companies (Meetings of Board and its Powers) Rules 2014. It states provision for convening and conducting Board meetings through video conferencing or other audio visual means.

1. All the necessary requirements shall be made by the company in order to call a board meeting properly. Also, it is necessary that beforehand all the requirements are made to avoid failure of video of audio-visual means.
2. The persons whom the authority is given to properly call a board meeting are the chairperson and company secretary of the company. Also, some of the things are necessary to insure, which are listed as follows, namely:-
3. to safeguard the integrity of the company by ensuring sufficient security and identification procedures
4. to make sure all the equipments are well arranged in advance for calling a board meeting. Like for providing transmission of the communications for effective participation of the directors and other authorized participants at the Board meeting.
5. To record the proceedings are prepare the minutes of the meetings;
6. To maintain tape recording or other electronic recording mechanism as a part of the records of the company at least before the time of completion of audit of that particular year.
7. To make sure that no other person other than the ones authorized have the access to the board meeting through video conferencing mode or other audio-visual means; and
8. To recheck that all the participants are able to attend the meeting through audio-visual means and can hear properly. In addition to it, make sure that all the other participants can clearly attend the meeting but the different abled person, may make request to the Board to allow a person to accompany him.

Matters not to be dealt through Video Conferencing or Other Audio Visual Means

Here is the list of matters that cannot be discussed while conducting Board Meeting through video conferencing or other audio visual means, namely:-

1. the approval of annual financial statements;
2. the approval of the Board’s report;

• the approval of the prospectus;

1. the Audit Committee Meetings for consideration of accounts; and
2. the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

Quorum for Board Meeting

Section 174 of the Companies Act states the Quorum for Board Meeting. So, one-third of the total strength or two directors, whichever is higher, shall be the quorum of the Board Meeting.

Where the quorum is reduced due to resignation or removal, then the continuing directors may act for the purpose of increasing the number of directors to that required for the quorum.

The participation by a director through Video Conferencing or other audio-visual means shall also be counted under the Quorum.

If at any time the number of interested directors exceeds or becomes equal to two-thirds of the total strength of the Board of Directors (BOD), the members not interested and present in the meeting being not less than two shall be counted in the quorum.  

Agenda for Board Meeting

The authorized persons should meet and discuss the agenda for calling a board meeting. Moreover, approving the minutes of the last meeting and other necessary business matters. Other matters can also be discussed if found necessary by the chairperson and company secretary. Preparing an agenda for board meeting is a necessary provision which must be prepared with due care.

Conducting a Board Meeting

The manner or procedure in which an item or business has to be conducted at a Board Meeting is given under the Articles of Association (AOA) of a company. On the day of the meeting, the chairperson announces and discuss on the agenda discussed.

Adjourning Board Meeting

As per Section 174, if in the meeting, the quorum was not formed then unless the articles of the company otherwise provide, the meeting shall automatically stand adjourned to the same day at the same time and place in the next week. Where it’s a National Holiday, till the next succeeding day, which is not a National Holiday, at the same time and place.