Many Professional has this query “How to conduct Board Meeting?” because we all have experienced Board Meetings on Paper only not in reality. In India, a Major structured business is run by closely held Private Limited Companies where major Company Secretaries don’t get an opportunity to actually conduct board meetings.
As a Company Secretary, conducting a board meeting for the first time can be a daunting task. Board meetings are crucial to the success of any company, and it is important to ensure that they are conducted in a professional and efficient manner. In this article, we will guide you on how to conduct board meetings effectively. Those who are reading and already experienced in holding actual Board Meetings can drop their comment and suggestion.
Board Meetings as per Companies Act 2013
Board Meetings are an essential aspect of running a company, and it is mandatory for every company to conduct them as per Section 173 of the Companies Act, 2013. The board of directors of a company is responsible for making strategic decisions and overseeing the company’s overall operations. A board meeting is an opportunity for the directors to discuss and decide upon the company’s crucial matters.
According to the Companies Act 2013, a company must hold at least four board meetings every year, with a maximum gap of 120 days between two consecutive meetings. The board meetings can be conducted physically or through video conferencing or any other audio-visual means. However, the quorum for the board meeting shall be either one-third of the total strength of the board of directors or two directors, whichever is higher.
The board meetings have to be conducted as per the agenda that is circulated among the directors before the meeting. The agenda shall contain the matters that are to be discussed and decided upon in the meeting. The minutes of the previous board meeting shall also be circulated among the directors before the meeting, and they shall be approved in the current board meeting.
The decisions taken in the board meeting shall be recorded in the minutes of the meeting, and they shall be signed by the chairperson of the meeting. The minutes shall contain the following details:
- Date, time and venue of the meeting
- Names of the directors present and absent
- Confirmation of the minutes of the previous board meeting
- Matters discussed and decisions taken
- Any other business with the permission of the chairperson
The minutes of the board meeting shall be maintained in a minute book, and they shall be preserved for a minimum period of eight years from the date of the meeting. The minute book shall be kept at the registered office of the company, and it shall be open for inspection by the directors.
It is essential for the company secretary or any other person authorized by the board of directors to maintain the minutes of the board meeting. The company secretary shall also ensure that the board meetings are conducted as per the provisions of the Companies Act, 2013.
The meeting of the Board of Directors is crucial for the effective functioning of a company, and it is mandatory for every company to conduct them as per the provisions of the Companies Act, 2013. The board meetings shall be conducted as per the agenda, and the decisions taken shall be recorded in the minutes of the meeting. The company secretary shall ensure that the board meetings are conducted as per Section 173 of the Companies Act, 2013, and the minutes are maintained as per the prescribed format.
Key Points that every Company Secretary should know while conducting Board Meetings
Notice of Board Meeting
As per the Companies Act, 2013, a notice of not less than seven days is required to be given to all the directors of the company to convene a Board Meeting. The notice should be in writing and should contain the date, time, and place of the meeting.
Quorum
The quorum for a Board Meeting is one-third of the total strength of the Board of Directors, or two directors, whichever is higher. In case the company has only two directors, then both of them must be present to constitute a quorum.
Minutes of Board Meeting
The minutes of the Board Meeting should be recorded in writing and signed by the Chairperson of the meeting. The minutes should contain a record of all the decisions taken at the meeting, the names of the directors present, and any other information that the Board considers relevant.
Disclosures
The Companies Act, of 2013, requires directors to disclose their interests in any contract or arrangement with the company. This disclosure must be made at the Board Meeting, and the minutes of the meeting should reflect the same.
Related Party Transactions
The Companies Act, of 2013, lays down specific rules regarding related party transactions. Any transaction between a company and its directors, their relatives, or firms in which they are interested, must be approved by the Board of Directors at a Board Meeting.
Process to Convene Board Meetings in India
Board Meetings are an important aspect of running a company, and it is mandatory for every company to conduct them as per the provisions of the Companies Act, 2013. Convening a board meeting involves various steps that need to be followed to ensure that the meeting is conducted effectively and efficiently.
Here is a step-by-step process to convene board meetings in India:
- Preparation of Agenda: The first step in convening a board meeting is to prepare the agenda. The agenda should contain the matters that need to be discussed and decided upon in the meeting. The agenda should be circulated among the directors before the meeting.
- Fixing the Date, Time, and Venue: Once the agenda is prepared, the next step is to fix the date, time, and venue of the meeting. The date and time of the meeting should be convenient for all the directors, and the venue should be a place where the meeting can be conducted smoothly.
- Issue Notice: After fixing the date, time, and venue, a notice shall be issued to all the directors of the company informing them about the date, time, and venue of the meeting. The notice shall be given in writing or by electronic mode, as per the choice of the director.
- Quorum: The quorum for the board meeting shall be either one-third of the total strength of the board of directors or two directors, whichever is higher. The quorum shall be present throughout the meeting.
- The day before Meeting; Sitting Arrangement should be Comfortable so that everyone can see each other. Pen and Notepad should be placed for everyone participating in the meeting along with a glass of water. Prior arrangement for PPT if any matter requires Presentation.
- On the Day of the Meeting: CS will require to take signature on Attendance Sheet, and a Welcome note shall be given by the CS. The chairman of the Meeting will confirm the quorum and read out the agendas to be discussed in the meeting.
- Conducting the Meeting: The meeting shall be conducted as per the agenda, and the decisions taken shall be recorded in the minutes of the meeting by the company secretary. Company Secretary will conclude the Meeting by giving a vote of thanks. The minutes shall be signed by the chairperson of the meeting post-preparation.
- After Passing the resolution: A round of Tea or snacks shall be served to all the Board Members and attendees. There could be lunch or dinner as well as per the time of Meeting require.
- Approval of Minutes: The minutes of the previous board meeting shall be circulated among the directors before the meeting, and they shall be approved in the current board meeting.
- Filing of Forms: After the meeting is concluded, the company secretary or any other person authorized by the board of directors shall file the necessary forms with the Registrar of Companies within the prescribed time.
Importance of Board Meetings in a Company
Board Meetings are an essential aspect of running a company, and they play a critical role in decision-making and strategic planning. The board of directors is responsible for making important decisions related to the overall operations of the company. A board meeting provides a platform for the directors to discuss and decide upon the company’s crucial matters.
Here are some of the reasons why board meetings are essential for a company:
- Decision Making
The board of directors is responsible for making strategic decisions related to the company’s growth and development. A board meeting provides an opportunity for the directors to discuss and deliberate on crucial matters related to the company and make informed decisions.
- Monitoring the Company’s Performance
The board of directors is responsible for monitoring the company’s performance and ensuring that it is aligned with the company’s objectives. A board meeting provides a platform for the directors to review the company’s performance and take corrective measures if necessary.
- Compliance with Laws and Regulations
A board meeting is a platform for the directors to discuss and ensure compliance with the various laws and regulations that govern the company. The board of directors is responsible for ensuring that the company follows all the applicable laws and regulations.
- Stakeholder Management
A board meeting provides a platform for the directors to discuss and manage the stakeholders’ interests. The board of directors is responsible for ensuring that the company’s decisions and actions are in the best interest of all stakeholders.
- Strategic Planning
A board meeting is a forum for the directors to discuss and plan the company’s future. The board of directors is responsible for formulating and implementing the company’s long-term strategic plans.
Conclusion of the Reading
In conclusion, convening a board meeting in India involves various steps that need to be followed to ensure that the meeting is conducted effectively and efficiently. The agenda shall be prepared, and the date, time, and venue of the meeting shall be fixed. Notice shall be issued to all the directors, and the quorum shall be present throughout the meeting. The decisions taken shall be recorded in the minutes of the meeting, and the minutes shall be approved in the next board meeting. The necessary forms shall be filed with the Registrar of Companies within the prescribed time. The company secretary shall ensure that the board meetings are conducted as per the provisions of the Companies Act, 2013.