Unlike calling a shareholder’s general meeting or annual general meeting, calling a board meeting is not governed by the Companies Act 2006 (“CA 2006”).
A directors’ first port of call must therefore always be to read their company’s articles of association, which usually sets out the rules by which directors of that company can call and conduct board meetings.
You must give the other directors notice that you intend to call a board meeting. This must include the proposed date, time and place of the meeting, as well as the means of communication if all the directors are not going to be in same place, or indeed if you are facing a global pandemic and must work from home.
Often, it is at this stage where the chair or company secretary puts together the relevant documents relating to the business of the meeting for the other directors to peruse. Whilst it is not essential at this stage, the other directors should be provided with sufficient time to examine the papers, or at least time must be set aside in the board meeting for this purpose.
Depending on your company’s articles of association, notice can be given either verbally or in writing. Some articles may not set out any notice provisions, so the fallback provision is to provide ‘reasonable’ notice.
‘Reasonable’ notice means that a director should act in accordance with their company’s usual practice and have regard to the surrounding circumstances. For example, an urgent issue may arise and so it may be ‘reasonable’ to provide relatively short notice to deal with it. In small private companies where all the directors are present, a few minutes’ notice might be enough.
Usually, we recommend providing the other directors with at least one week’s notice and doing so via e-mail, so that it is in writing to avoid any confusion.
‘Quorum’ means the minimum number of directors that need to be present to make the board meeting valid.
Again, it is very important to check your company’s articles of association to see what the minimum number is stated in there. Generally, the minimum number is two. Without sufficient quorum, the company’s business may not be validly transacted.
3. Elect a Chair
The chair will usually have the casting vote, and this may have been decided before the board meeting or during the board meeting.
Practically, there will always need to be a chair at a board meeting who not only has the casting vote, but has to ensure that the company’s notice, quorum and voting requirements have been fully complied with.
4. Declaration of Interests
Once the directors are present at the board meeting and a chair has been elected, the directors should then make a declaration to the company of their interests in the transactions/arrangements that are to be considered at the meeting.
A company’s articles of association may state that a director may vote to any contract or arrangement in which he is interested and shall be part of the quorum. Other articles may list specific transactions in which a director cannot vote on if they have an interest in it.
Do ensure that you are familiar with your company’s articles in this respect, as this declaration of interest must be complied with in accordance with sections 177 and 182 of the CA 2006.
5. Voting / Business of the Meeting
The next step is to vote on the topics/transactions raised at the board meeting. Depending on the business of the meeting, debates and discussions should be encouraged to avoid one director taking control.
A company’s articles will usually set out the voting guidelines and, unless they provide otherwise, the general position is that one director has one vote which is given by a show of hands and the majority vote wins.
Minutes should be written up following the board meeting to accurately record the decisions made. It is prudent for the chair/secretary to circulate the draft minutes to obtain the approval of all the directors who attended the meeting before it is signed. This avoids any potential disputes later arising.
The minutes will then form part of the company’s records and, under section 247 of CA 2006, they must be kept for 10 years from the date of the meeting either electronically or in hard copy.
Any relevant filings at Companies House or updates of the company’s registers, depending on what the business of the meeting was, must then be made within the relevant deadlines.
Should you require any further information or have specific questions relating to procedures and filings your company must undertake, please do not hesitate to get in touch or call our corporate team today.