Boards often nominate one director to be responsible for organising scheduled board meetings, and to whom requests for meetings by individual directors can be referred. Read about what they need to do when calling a board meeting.
This update was published in Small Business Update - June 2014
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If the company has a company secretary, the responsible director will usually work with the secretary to organise meetings. Otherwise, the board may agree that they can work with, or delegate to, an employee or to outsiders such as their legal advisers, that the board considers competent to help.
A responsible director (and anyone working with them) will draft the agenda for each board meeting, and decide on the information to be sent to the directors in advance of the meeting and on the form and content of the notice of the meeting.
Notice of each board meeting should be given to all directors. Even if a director states that they cannot attend, or if they are travelling and too far away to attend, or even if they are ill, unless the articles say it need not be (for example, there is often an exception for directors who are absent from the UK), all directors should receive information on when and where the meeting will take place.
The notice does not have to be in writing unless the company’s articles say it must (which is rare) - although it is prudent to give written notice if possible. Some companies therefore give notice verbally (face-to-face, or by phone), some send notices by post, while others send out hard copy, fax or email notices. Whatever the practice, it must be reasonable and fair to the directors, taking into account factors such as where they are likely to be, the meeting venue and the time of the meeting.
Some companies send no written agenda or other information with the meeting notice. However, best practice advises sufficient information should be given with the notice to enable directors to decide whether or not to attend the meeting, and to promote effective use of meeting time. They should also be able to prove that they had sufficient information to comply with their statutory and other duties, eg to make decisions that promote the long-term success of the company, if they are challenged.
Usually this means at least management accounts (especially cash flow, turnover and profitability to establish the credit or debt position and show if additional action is needed). In larger companies there may be reports from the divisional directors or their managers on the various aspects of company operations. Other documentation may be needed to support discussion and decisions on particular agenda items, for example the appointment of a new director, an application for external funding, or an acquisition.
Usually all board members receive the same information, even if they are part-time or non-executive.
If the board has not agreed a standard notice period for board meetings, and none is specified in the articles, the notice period must be ‘reasonable’, ie it must balance the need to give each director time to make arrangements to attend against the urgency of the business of the meeting. Seven days is usually a reasonable period, but it will depend on the circumstances - for example, if directors are based abroad, longer may be needed.
If insufficient notice of a meeting is given and not all directors can attend, those who were unable to attend may have the right to demand a second meeting, eg to try and overturn the decisions made at the first meeting.
The responsible director should ensure minutes are taken at meetings by a competent person, and for these to be circulated to directors in a timely fashion after the meeting, along with any separate documents relating to new decisions and follow-up action.
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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