Procedure for Conducting Board Meeting

Naveen Khandelwal

Naveen Khandelwal

Published on: Jul 27, 2020

Aakanksha Singhal

Updated on: Oct 27, 2023

★★★★★(39 Rating)

35178

Introduction

Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board. [Section 173(1)] 

A One Person Company, small company and dormant company shall be deemed to have complied with the provisions if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days. [Section 173(5)]

However, nothing contained in this sub-section and in section 174 shall apply to One Person Company in which there is only one director on its Board.

Mandatory Requirements for conducting Board Meeting

1. Notice, agenda and notes on agenda shall be given at least 7 days before the Meeting in writing to every director at their address registered with the company through hand delivery or by post or by facsimile or by e-mail or by any other electronic means. In case the company sends the Agenda and Notes on Agenda by speed post or by registered post, an additional two days shall be added for the service of Agenda and Notes on Agenda. [Section 173(3) and Clause 1.3.1, 1.3.6 & 1.3.7 of Secretarial Standard-1 (SS-1)]
2. Board Meeting may be called at shorter notice to transact urgent business subject to the presence of at least one independent director, if any. In the absence of independent Directors from such a Board Meeting, the decisions taken at such a meeting shall be circulated to all the Directors and would be finalized only on ratification thereof by at least one independent director, if any. [Proviso to Section 173(3) and Clause 1.3.11 of Secretarial Standard-1 (SS-1)]
3. The participation of Directors in a meeting of the Board may be either in person or through video conferencing or other audio visual means, which are capable of recording and recognizing the participation of the directors and of recording and storing the proceedings of such meetings along with date and time. The Central Government may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio visual means. [Section 173(2)]
4. Quorum shall be present not only at the time of commencement of the Meeting but also while transacting business. [Clause 3.1 of Secretarial Standard-1 (SS-1)]
5. The quorum for a meeting of the Board of Directors of a company shall be one third of its total strength or two directors, whichever is higher, and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum. [Section 174(1)]
6. Such Director shall neither be reckoned for Quorum nor shall be entitled to participate in respect of an item of business in which he is interested, but in case of a private company, ensuing the disclosure of their interest, such Director shall be entitled to participate in respect of such item. [Clause 3.2 of Secretarial Standard-1 (SS-1)]
7. Presence of Chairperson shall be required.
8. Maintain the Minutes Book for Signing the minutes of Previous Board Meeting by the Chairman.

Following Procedure is to be followed for Conducting Board Meeting

[Section 173 & 174 and Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with SS–1 (Secretarial Standard on Meetings of the Board of Directors) issued by ICSI]

• Calling of Board Meeting
  1. Company shall issue the Notice, Agenda and Notes to Agenda to every Director at his address registered with the company not less than seven days before the Meeting, unless the Articles prescribe a longer period. In case the Company sends the Notice, Agenda and Notes to Agenda by speed post or by registered post, an additional two days shall be added for the service of Notice.
  2. Notice, Agenda and Notes to Agenda are issued by the Company Secretary or where there is no Company Secretary, any Director or any other person authorized by the Board for the purpose.
  3. Notice shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio visual means, and shall provide all the necessary information to enable the directors to participate through video conferencing mode or other audio visual means.
  4. A director intending to participate through video conferencing or audio visual means shall communicate his intention to the Chairperson or the company secretary of the company sufficiently in advance so that company is able to make suitable arrangements in this behalf. [Rule 3(3) of the Companies (Meetings of Board and its Powers) Rules, 2014]
  5. Notes on items of business which are in the nature of Unpublished Price Sensitive Information may be given at a shorter period of time than stated above, with the consent of a majority of the Directors, which shall include at least one Independent Director, if any. [Clause 1.3.7 of Secretarial Standard on meetings of Board of Directors)]
  6. Each item of business to be taken up at the Meeting shall be serially numbered. Numbering shall be in a manner which would enable ease of reference or cross-reference. [Clause 1.3.9 of Secretarial Standard on meetings of Board of Directors)]
• Convening of Board Meeting
  1. Check the presence of Quorum for convening the meeting. Quorum shall be present not only at the time of commencement of the Meeting but also while transacting business.
  2. Check the Leave of absence and the same shall be granted to a Director only when a request for such leave has been communicated to the Company Secretary or to the Chairman or to any other person authorized by the Board to issue Notice of the Meeting.
  3. The Chairman of the Company shall be the Chairman of the Board. If the company does not have a Chairman, the Directors may elect one of themselves to be the Chairman of the Board to conduct the meeting.
  4. Every company shall maintain attendance register for the Meetings of the Board and the Chairman shall take a Roll Call at the commencement of the meeting and confirm the attendance of Directors participating through video conferencing.
  5. The Chairman shall request the Director participating through Electronic Mode to state his full name and location from where he is participating and shall record the same in the Minutes. The proceedings of such Meetings shall be recorded through any electronic recording mechanism and the details of the venue, date and time shall be mentioned.
  6. Directors participating through Electronic Mode shall be deemed to have signed the attendance register, if their attendance is recorded in the attendance register and authenticated by the Company Secretary or where there is no Company Secretary, by the Chairman or by any other Director present at the Meeting, if so authorized by the Chairman and the fact of such participation is also recorded in the Minutes.
  7. Registers of all contracts or arrangements shall be placed in the meeting of the Board and signed by all the directors present at the meeting. [Section 189]
  8. If the Chairman is interested in an item of business, he shall entrust the conduct of the proceedings in respect of such item to any Non-Interested Director with the consent of the majority of Directors present and resume the chair after that item of business has been transacted. However, in case of a private company, the Chairman may continue to chair and participate in the Meeting after disclosure of his interest.
  9. The Chairman shall use his second or casting vote in case of equality of votes.
  10. Permission of Chairman shall be taken with the consent of a majority of the Directors present in the Meeting for taking up any item not included in the Agenda. The decision taken in respect of any other item shall be final only on its ratification by a majority of the Directors of the company, unless such item was approved at the Meeting itself by a majority of Directors of the company.
  11. Check that vote of thanks is given to the Chair at the conclusion of the Board Meeting.
• Preparation and Signing of Minutes
  Refer the Procedure for Preparation, Signing and Compilation of Minutes of Board Meeting.