Please enable JavaScript.
Coggle requires JavaScript to display documents.
Board meetings - Coggle Diagram
Board meetings
Board meetings
-
The frequency will depend entirely on the board or chair's preference and the stage of the company's evolution - an early stage company might have more frequent meetings whereas a much more developed and table business might only need a light touch approach from the board
Formal board minutes will be kept, recording not only the decisions but the rationale for those decisions. Historically board minutes were often written very much as an internal record of business decisions
Particuarly in industries with external regulators, minutes are a primary source of information on the performance of the board and management and minutes are increasingly written with this external audience in mind
There is no minimum number of board meetings that must be held each year, although in practice as a minimum a meeting should be held to approve the financial statements formally even for dormant companies
The role of the board of directors varies depending on the size and complexity of the company's business and whether it is a member of a group where subsidiary directors are not so involved in determining group strategy if at all, or if it is a listed company bringing with it greater focus on corporate governance end investor oversight
For the vast majority of private companies, formal board meetings are seldom held with any formal resolutions approved as WR
Directors must ensure that they are fully aware of all decisions being reached in this informal manner, as they are collectively responsible for the company's activities
Ignorance is no excuse and in extreme circumstances can lead to disqualification and personal liability
Listed companies typically maintain a schedule of dates fo board and committee meetings in order to ensure the board has the proper oversight and strategic planning of a listed company in accordance with the listing regime and the UK CG Code
The number of meetings vary from company to company and are usually disclosed in the corporate governance section of the annual report
Although directors carry collective responsibility for their decisions, formal votes at directors meeting are rare with most decisions being agreed following sufficient discussion to resolve any uncertainties or concerns. Where unanimity is not possible, the matter will usually be deferred to another meeting to allow the concerns to be addressed
-
Board meetings are general discussion meetings and unlike the formal structured nature of meetings where formal resolutions ae proposed, usually proceed on a less rigid way with projects and reports being brought to the meeting for review and discussion
The chair assess whether the general view of the meeting should be incorporated into the minutes of the meeting as the decision of the board, either in narrative form or where appropriate as formal resolution. If the views of directors are fairly evenly balanced on the pros and cons of a particular course of action, it may not be appropriate to put the matter to a formal vote
Although not on the formal agenda for the meeting or indeed any formal agenda, the chair should permit any director or the CS to raise at any board meeting any matter concerning the company's compliance with any legal or regulatory requirement
The meeting rules and procedures are the same for physical and virtual meetings however good meeting etiquette and observance of the formalities is even more essential for the good running and effectiveness of a virtual meeting.
Chair
-
The chair should ensure that all points of view are discussed on any issue while avoiding repetition
Discussion should be pertinent to the matter under consideration and discussion should not be allowed to digress into other areas
-
While the use of a casting vote is entirely at the discretion of the chair, it is suggested that this should only be used to defeat the resolution on the basis that there is no majority in favour of it. In practice it is unusual for decisions of directors to proceed unless there is unanimity or failing that a healthy majority in favour
Chairing a board is much more than just ensuring all views are heard and that the meeting runs smoothly is much more difficult and clear ground rules should be established and the formality of speaking with the consent of the chair is more closely observed
A good chair will promote good relationships with all directors and senior managers encouraging them to use all their skills, qualifications and experience to provide an appropriate forum to set and monitor strategy, create value and ensure accountability.
The chair is responsible for ensuring the board regularly reviews its own performance collectively and individuals and that there are appropriate resources to develop directors
The chair and other independent directors should ensure effective communication with shareholders in general and with the major shareholders specifically to ensure their views are known to the board
-
Quorum
The quorum for board meetings is set out in the company's Articles and if these follow the Model Articles, will be two dirctors
If the company only had two directors and one resigned or died, Model Articles provide that the sole continuing director may appoint another director
Where the number of directors falls below the minimum required by the Articles, the remaining directors have no power other than to appoint another director or directors or to call a GM of the members at which another director could be appointed
It is increasingly common for private companies to incorporate in their Articles a provision vesting all the company's authority in the hands of a sole or surviving director even where their number has fallen below the minimum number stipulated elsewhere
Types of meetings
In companies with a mix of executive and NEDs, the management of the company is often divided into two or more elements
Formal structured board meetings set corproate strategy and evaluate the performance of the company executives against that strategy and usually more informal and flexible, executive management meetings where the day-to-day business decisions to implement and deliver the corporate strategy are made and performance measured against a whole array of KPIs
In smaller businesses, and those without NEDs, formal board meetings are rarely held with most discussions and decisions being made informally or at management meetings held on an as required basis
Management meetings
These will usually be held frequently often at regular pre-determined intervals such as weekly, fortnightly or monthly
There will be a general agenda with the exact business determined by the actual performance of the various departments or divisions and as a result of usually free flowing discussions around particular issues of current concern
Any minutes might be limited to action points with little, if any records of the discussions leading those decisions or actions
-