Company is an Artificial Person created by Law. Company is run by Board of Directors. Board of Directors is appointed by Shareholders of the company. Major decisions for the benefit of company are taken by Board of Directors on behalf of shareholders in the best interest of the company and for enhancing shareholders value. The decisions of Board of Directors of company after their approval are translated into resolutions of the company. Resolutions pave way for smooth conduct of business of the company.
To take decisions and passing of resolutions by Board of Directors, the Directors need to meet personally at the registered office or other place as agreed by Directors. The Board of Directors need to meet every three months and minimum four board meetings should be held in every year.
Video conferencing mode of holding board meeting online is a modern technological gift to companies for conducting board meetings virtually. Virual Board meetings save valuable time, money of Directors. The Directors can focus more on agenda items of board meetings properly and take sound decisions. In present COVID-19 and Pandemic Situation, Video conferencing/Virtual Board Meetings is a boon to corporate and Directors.
Some of the provisions of the Companies Act, 2013 with respect to holding Board Meeting through Video Conferencing are discussed as follows:
- As per Section 173(2) of Companies Act, 2013 (the Act) read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 (the Rules), every Company can hold a Board Meeting through video conferencing or other audio-visual means, which are capable of recording and recognizing the participation of the Directors. Storage of data and safe keeping of recorded meeting is important and Company Secretary can play vital role. Various Video conferencing meeting platform include Zoom Meetings, Blue jeans Meetings, Skype Meetings, Google Meet. Link for Board meeting through video conferencing mode should be generated and shared with eligible directors well on time.
- The quorum for a meeting of the Board of Directors of a company shall be 1[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 under this sub-section.
- Under section 173 and Para 2.1 of Secretarial Standard-1, companies, whether public or private limited companies must, hold a minimum of four board meetings between the directors in a calendar year. It is essential to note that the gap between two consecutive meetings of the board should not be more than one hundred and twenty days.(Now gap between two Board Meetings should not exceed 180 days).
- Under section 173(3) and Para 1.3 of Secretarial Standard-1, an advance notice of Board Meeting duly signed by any one Director of seven days must be sent to all directors prior to the meeting in writing. Such notice about the meeting must be sent through the post, by hand, or by e-mail or any other electronic medium. The notice must contain relevant details informing the directors about the option available to the directors to attend the board meeting through video conferencing or any other audio-visual means and all additional relevant information to allow the directors to attend the meeting through video conferencing or any other audio-visual means .Agenda for the Board meeting may be enclosed with the Notice convening Board Meeting.
- Before commencement of Board Meeting through Video Conferencing mode, a roll call will be taken at the start of the meeting by the chairperson, and every director participating in the board meeting through video conferencing or any other audio-visual means must state, for the record, namely:
1) Full Name of Director and his DIN Number
2) Location from where he is speaking
3) Declaration from Director orally that he received Notice and Agenda of Board Meeting
4) Oral declaration that in Video Conferencing mode and room of board Meeting, no other person is present.
5) Attendance of Directors is ascertained during this roll call and shall be considered as a Quorum for Board Meeting.
6) All safety measures including confidentiality of meeting and protection of call data at the board meeting be the top priority of management of company including Company Secretary.
- Conduct of Board Meeting: Under sub-rules 8, 9, and 11 of Rule 3 of Companies Rules (Meetings of board and its power), 2014, once the quorum is fulfilled, the chairman shall further proceed for transacting businesses specified in the agenda of the meeting. The participants are required to identify themselves for the record before discussing any item of business in the agenda.
In case passing a Resolution is objected, and there is a need to put it to vote, the chairperson will record the votes of every director who is participating, including the director who attends the meeting through video conferencing. Finally, the Resolution shall be passed on the decision of the majority once the chairperson makes a note of each vote by the director.
Whenever a discussion is completed on an agenda item, the chairperson will declare the summary of the decision made on such an item. The name of the directors shall also be announced who dissented from the decision of the majority. Based upon decisions made and resolutions passed, the company secretary shall prepare minutes of Board meeting held through video conferencing.
- Based upon Video & Audio recordings of Board meeting, the Company Secretary should prepare minutes of Board meeting and sent to Chairman of meeting of his signature. Signed minutes to be circulated to all present directors.
- Matters which can be discussed at a Board meeting convened through Online Video Conferencing mode are as follows : All items of business including following business :
(a) Approval of the annual financial statement;
(b) Approval of the Board’s report;
(c) Approval of the prospectus;
(d) Audit Committee meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under Section 134(1) of the Act; and
(e) Approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
However, in light of the Covid-19 pandemic, the Ministry of Corporate Affairs, by way of the Companies (Meetings of Board and its Powers) Amendment Rules, 2020 dated March 19, 2020, inserted the sub-rule (2) to Rule 4 stating that the matters listed above could also be held via video conferencing and other audio visual means until June 30, 2020, which was later extended to September 30, 20200. On December 30, 2020, another amendment notification was issued by the Government of India through the Ministry of Corporate Affairs which extended this date to June 30, 2021. It seems that in view of Current Pandemic situation, Board meetings through Video Conferencing mode shall be a normal mode of holding Board meetings/Annual General meetings.
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Disclaimer: The Views expressed in this Article are based upon prevailing facts and Law to date and views expressed are purely personal in nature. Readers are advised to seek expert opinion before arriving at a decision. You may reach me at csdeepakamrutkar@gmail.com.
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