How many board meetings should you hold a year?
Under the Companies Act, there is no obligation to hold a set number of meetings per year. However, there is a requirement to hold the meetings with a sufficient frequency to ensure that a Directors’ duties are adequately met. Monthly or even quarterly meetings will usually be enough, but this may vary depending on the particular demands of the business.
How much notice should be given before a board meeting?
The articles of association of a company usually provide that any Director may call for a meeting to be convened. As a general rule, notice must then be served on all Directors who are entitled to attend the meeting; regardless of whether they are able to attend, for example, because they are abroad or ill.
The articles may specify a fixed period of notice but more often this is left to the discretion of the Directors, in which case notice should be ‘fair and reasonable’. This is likely to depend on the urgency of the matter to be discussed and the significance of what is being considered by the board. Only in exceptional circumstances should no notice be served.
Business that has been passed at a meeting and has been convened with defective or insufficient notice has been held by the courts to be invalid. The notice should contain the proposed date and time of the meeting, location and an agenda of items to be discussed.
Who should be present in the meeting?
For a meeting to be validly convened, a quorum of Directors must be present. This is usually specified in the company’s articles of association. Under the model articles the number may be fixed from time to time by the directors but must never be less than two.
Chairperson’s role
Most articles normally provide for the appointment of a Chairperson. This role exercises procedural control over the meeting and ensures that the formalities are met. The chair is usually responsible for:
• Keeping order;
• Ensuring that a quorum is present;
• Dealing with any procedural issues; and
• Ensuring that the business of the meeting is dealt with.
Voting rights in a board meeting
The articles will usually provide that a resolution will be passed by a majority of those directors present and who are entitled to vote. The articles may also go on to state that the Chairperson has a casting vote. However, such right is not automatic unless the articles expressly provide for it.
Once a resolution has been properly passed it is the duty of all the Directors (not just those who voted in favour) to ensure that the resolution is properly implemented.
Conflicts of interest
The articles will normally provide that a Director may not vote on a matter on which they are materially interested and which may conflict with the interests of the company.
The model articles provide that a Director is not to be counted as part of the quorum for any meetings containing a resolution on which he or she is interested, although this provision can normally be disapplied by an ordinary resolution of the shareholders.
Regardless of whether or not directors are actually entitled to vote or not, all Directors must comply with section 177 and 182 of the Companies Act in relation to declaring their interests in any matter proposed at a board meeting.
Do we need to take minutes at board meetings?
Failure to take minutes is an offence punishable by a fine. Whilst it is not necessary to record every word to the letter, the minutes should include an accurate note of all decisions and resolutions and ideally the thought process that led to the decision being reached.
How long should we keep the minutes from the board meeting?
Records of the board minutes should be kept for a minimum of 10 years either in writing or electronically, although Institute of Chartered Secretaries and Administrators (ICSA) recommends that minutes are retained for the life of the organisation. It is also worth remembering that any Director has the right to inspect and take copies of minutes of meetings to enable him or her to discharge his duties as a Director of the company.
Following these key steps should ensure that meetings are both effective and comply with the Companies Act.
If you would like more guidance on how to manage successful board meetings, please contact Paul Tyrer on 01260 282333.
How many board meetings should you hold a year?
Under the Companies Act, there is no obligation to hold a set number of meetings per year. However, there is a requirement to hold the meetings with a sufficient frequency to ensure that a Directors’ duties are adequately met. Monthly or even quarterly meetings will usually be enough, but this may vary depending on the particular demands of the business.
How much notice should be given before a board meeting?
The articles of association of a company usually provide that any Director may call for a meeting to be convened. As a general rule, notice must then be served on all Directors who are entitled to attend the meeting; regardless of whether they are able to attend, for example, because they are abroad or ill.
The articles may specify a fixed period of notice but more often this is left to the discretion of the Directors, in which case notice should be ‘fair and reasonable’. This is likely to depend on the urgency of the matter to be discussed and the significance of what is being considered by the board. Only in exceptional circumstances should no notice be served.
Business that has been passed at a meeting and has been convened with defective or insufficient notice has been held by the courts to be invalid. The notice should contain the proposed date and time of the meeting, location and an agenda of items to be discussed.
Who should be present in the meeting?
For a meeting to be validly convened, a quorum of Directors must be present. This is usually specified in the company’s articles of association. Under the model articles the number may be fixed from time to time by the directors but must never be less than two.
Chairperson’s role
Most articles normally provide for the appointment of a Chairperson. This role exercises procedural control over the meeting and ensures that the formalities are met. The chair is usually responsible for:
• Keeping order;
• Ensuring that a quorum is present;
• Dealing with any procedural issues; and
• Ensuring that the business of the meeting is dealt with.
Voting rights in a board meeting
The articles will usually provide that a resolution will be passed by a majority of those directors present and who are entitled to vote. The articles may also go on to state that the Chairperson has a casting vote. However, such right is not automatic unless the articles expressly provide for it.
Once a resolution has been properly passed it is the duty of all the Directors (not just those who voted in favour) to ensure that the resolution is properly implemented.
Conflicts of interest
The articles will normally provide that a Director may not vote on a matter on which they are materially interested and which may conflict with the interests of the company.
The model articles provide that a Director is not to be counted as part of the quorum for any meetings containing a resolution on which he or she is interested, although this provision can normally be disapplied by an ordinary resolution of the shareholders.
Regardless of whether or not directors are actually entitled to vote or not, all Directors must comply with section 177 and 182 of the Companies Act in relation to declaring their interests in any matter proposed at a board meeting.
Do we need to take minutes at board meetings?
Failure to take minutes is an offence punishable by a fine. Whilst it is not necessary to record every word to the letter, the minutes should include an accurate note of all decisions and resolutions and ideally the thought process that led to the decision being reached.
How long should we keep the minutes from the board meeting?
Records of the board minutes should be kept for a minimum of 10 years either in writing or electronically, although Institute of Chartered Secretaries and Administrators (ICSA) recommends that minutes are retained for the life of the organisation. It is also worth remembering that any Director has the right to inspect and take copies of minutes of meetings to enable him or her to discharge his duties as a Director of the company.
Following these key steps should ensure that meetings are both effective and comply with the Companies Act.
If you would like more guidance on how to manage successful board meetings, please contact Paul Tyrer on 01260 282333.