A board meeting is the most vital part of the management functions and steps after the registration of your company. Therefore, you as a part of the management of the company must learn how to convene a board meeting (or directors’ meeting).

Since the company is a fictitious person, separate from the members and directors, there must be some natural persons who manage it. Under the law, a company’s management is in the hands of the Board.

The board of directors is responsible for policy-making, guiding company employees on operations, and monitoring the implementation of the business plans. They must ensure that the company conducts its business under the law and in the best interests of shareholders.

Conducting business in a legal way and with responsibility increases shareholders’ value and minimizes risks. Any illegal action may invite regulatory penalties or legal action, causing a loss of reputation. On the other hand, carelessness on the part of employees may result in business loss. Therefore, an effective Board, with due qualifications, is vital for the performance of the Company as a going concern.

What is a Board Meeting?

A board meeting of a company is a formal meeting of the board of directors (BoD or Board) that must be held under the Companies Act 2017 at a defined interval or as needed. The BoD meeting is held to review the overall performance of the company formally. This review may include strategic and policy decisions, and a discussion on problems that the company is facing or may face in the future.

How many BoD Meetings a Company must hold?

The Board may hold its meetings as and when required or deemed fit. There is no limit on the number of meetings, minimum or maximum, for a private limited company. However, for a public company, the law requires that the directors must hold at least one board meeting in a quarter.

Can non-baord Members Attend Board Meetings?

Since the purpose of the BoD meeting is to review the company’s overall performance, the evaluation of various departments is inevitable. This departmental evaluation can only be done based on reports presented to the Board by the departmental heads. And of course, the Board may ask questions on various points.

Therefore, though a company board meeting is the meeting of the BoD but non-board members may also attend the board meetings if permitted and invited by the Board.

How to Create an Agenda for a Board Meeting?

Like every meeting, a board meeting of a company has an agenda i.e. points to be placed before the board for discussion. The person responsible for the secretarial work in the company prepares the agenda items along with the relevant documents like working papers, or reports. For example, if a budget approval is required, the budget plan along with all the details will be attached to the notice. If needed, a presentation may be given by the relevant team member.

This is necessary to enable the board members to be prepared before the meeting and have a fruitful discussion in the meeting. The agenda items are prepared in a series so that those points may be discussed one by one at the meeting.

Who can Call a Board Meeting?

The directors can call a board meeting at any time, to transact any business within their powers. The directors’ meeting may be called by the Chairman of the Board or on the requisition of the director(s).

If the CEO who is responsible for the day-to-day management of the company needs the approval of the board, he may discuss the matter with the Chairman to call a meeting. If the company has a secretary, he on the instructions of the CEO, will take up the matter with Chairman to call the meeting.

How to Call a Board Meeting?

Once the Chairman agrees on calling the meeting, the secretary or any other person assigned the job will issue a notice to all the board members. The agenda of the meeting and all the relevant documents will be attached to the notice to enable the board members to prepare for the meeting.

Notice of Board Meeting?

Every Director has a right to notice of a board meeting in writing, through the post, or by email. The notice must contain the agenda and working papers related to agenda items to be presented in the board meeting. There is no fixed time for notice, but as a practice, 7 days notice is a good option to allow the members of BoD to prepare.

What is Quorum for a Board Meeting?

For convening and holding a directors’ meeting, there is a minimum prescribed number of members for a board meeting. This prescribed number is called a quorum for the board meeting. At least one-third of the total number of directors or 2 directors, whichever is higher, for the time being of the company, forms a quorum for a board meeting.

In the absence of a quorum, a meeting will not be valid and decisions may be declared null and void. However, to benefit from communications technology, telepresence is also allowed. The presence of the Board member through video-link will be as valid as the presence in person.

How to Conduct a Board Meeting?

The BoD meeting is conducted by presenting the agenda items as per notice or as the Chairman decides. An item is presented to the Board and the member after discussion may decide on that item in the form of a resolution.

Who Chairs the BoD Meeting?

The Board may elect a chairman for their meetings and determine the period for which he will hold that office. However, if no chairman is elected, the directors present in a board meeting may elect one of them to be the chairman for the meeting. This procedure will also be adopted if the chairman is not present in a meeting within 10 minutes of the time fixed.

How to Write a Resolution for a Board Meeting?

As mentioned above, the decisions by the BoD are made in the form of resolutions. The Board members discuss each agenda item in detail and after discussion, the Board may approve or reject a resolution with a simple majority. The decision of a simple majority has the status of the decision of the Board as a whole. Any proposal placed before the Board is approved and recorded as a resolution.

The proceedings of the meeting including the resolutions passed by the Board are recorded in the form of minutes of the meeting. Every director shall be provided a copy of the draft minutes within 14 days of the date of the meeting. The directors may suggest changes to the minutes and once finalized the minutes shall be signed by the Chairman.

The company must keep the minutes’ books at the registered office of the company. The physical record must be kept for at least 10 years. The minutes in electronic form must be kept permanently.

The directors and the registrar or an authorized officer of the SECP may inspect the record of proceedings.