Compliance Checklist for Board Meeting through Videoconferencing [PL Archives]

According to Section 173 of the Companies Act, 2013 (Act), the participation of directors in a meeting of the Board may be either in person or through videoconferencing or other audio-visual means. If the participation of the director is through videoconferencing or other audio-visual means, then the company shall ensure that all the following points are complied with:(i) recording and recognising the participation of the directors; and

(ii) recording and storing the proceedings of such meetings along with date and time.This article is an analysis of the provisions relating to meeting of the Board of Directors through videoconferencing.

The article also contains the points to be included in the minutes of the meeting of the Board of Directors.

1. What is considered as non-participation of director.—If the director participates in the Board meeting through videoconferencing or through audio-visual means which cannot be recorded, recognised or stored, then the director has not  attended such meeting. If a director is attending a meeting of the Board through teleconference then the director has not attended such meeting.

2. Quorum.—The quorum for a meeting of the Board of Directors of a company shall be 1/3rd of its total strength or 2 directors, whichever is higher. The participation of the directors by videoconferencing or by other audio-visual means shall also counted for the purposes of quorum. The minutes of the meeting shall provide the names of director present in-person, directors present in Board meeting through videoconferencing or through audio-visual means, directors absent at the meeting, leave of absence granted to any directors.

3. Primary responsibility of compliance of provisions relating to Board meeting through videoconferencing.— The Chairperson of the meeting and the Company Secretary(CS), if any, shall take due and reasonable care:

(i) to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;

(ii) to ensure availability of proper facilities for providing transmission of the communications for eff ective participation of the directors;

(iii) to record proceedings and prepare the minutes of the meeting;

(iv) to store for safekeeping and marking the tape recording(s);

(v) to ensure that no person other than the director concerned is attending or has access to the proceedings of the meeting; and

(vi) to ensure that participants attending the meeting through audio-visual means are able to hear and see the other participants clearly during the course of the meeting. The summary of the above points shall be part of the minutes of the meeting.

4. Notice of Board meeting.—A meeting of the Board shall be called by giving not less than 7 days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means. The notice of the meeting shall inform the directors regarding the option available to them to participate through videoconferencing mode or other audio-visual means. The notice of the meeting shall provide all the necessary information to enable the directors to participate through videoconferencing mode or other audio-visual means.

5. Director’s discretion to participate in meeting through videoconferencing or audio-visual.—A director intending to participate through videoconferencing or audio-visual means shall communicate his intention to the Chairperson or Company Secretary of the company. If the director intends to participate through videoconferencing or other audio-visual means, he shall give prior intimation to that effect sufficiently in advance so that the company is able to make suitable arrangements. The minutes of meeting shall record about the receipt of the communication from director about the intentions to participate through videoconferencing or other audio-visual means.

6. Yearly declaration by directors.— Any director who intends to participate in the meeting through electronic mode may intimate about such participation at the beginning of the calendar year and such declaration shall be valid for 1 year. However, such declaration shall not debar him from participation in the meeting in person in which case, he shall intimate the company sufficiently in advance of his intention to participate in person. If the company receives such declaration, then the same shall be recorded in the minutes of meeting.

7. In absence of intimation by director to participate in Board meeting through videoconferencing.— If the director does not intimate about his participation in Board meeting through videoconferencing, then it shall be assumed that the director shall attend the meeting in person.

8. Roll call.—At the commencement of the meeting, a roll call shall be taken by the Chairperson when every director is participating through videoconferencing or other audio-visual means. The director shall state certain information for protecting the integrity of the meeting. It is essential to record such action in the minutes of the meeting of Board.

9. Venue of meeting.—With respect to every meeting conducted through videoconferencing or other audio-visual means, the scheduled venue of the meeting as set forth in the notice convening the meeting shall be deemed to be the place of the said meeting. All the recordings of the proceedings at the meeting shall be deemed to be made at such place.

10. Signing of registers.—The statutory registers which are required to be placed in the Board meeting(as per the provisions of the Act) shall be placed at the scheduled venue of the meeting. Where such registers are required to be signed by the directors, the same shall be deemed to have been signed by the directors participating through electronic mode, if they have given their consent to this eff ect and it is so recorded in the minutes of the meeting. It is essential to record the same in the minutes of the meeting of Board.

11. Speaking on any item of business on the agenda.—Every participant shall identify himself for the record before speaking on any item of business on the agenda. If a statement of a director in such meeting is interrupted or garbled, the Chairperson or CS shall request for a repeat or reiteration by the director.

12. Access in Board meetings.— From the commencement of the meeting and until the conclusion of such meeting, no person other than the Chairperson, Directors, Company Secretary and any other person (whose presence is required by the Board of Directors) shall be allowed access to the place where any director is attending the meeting either physically or through videoconferencing without permission of the Board of Directors. If some other person is invited at the meeting, the same shall be recorded in the minutes of the meeting of Board.

13. Matters not to be dealt with in a meeting through videoconferencing or other audio-visual means.— Certain matters shall not be dealt with in any meeting held through videoconferencing or other audiovisual means:

(i) approval of the annual fi nancial statements;

(ii) approval of the Board’s report;

(iii) approval of the prospectus;

(iv) Audit Committee meetings for consideration of financial statement including consolidated financial statement, if any, to be approved by the Board; and

(v) approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover. However, where there is quorum in a meeting through physical presence of directors, any other director may participate through videoconferencing or  other audiovisual means. The reference with respect to the physical presence of directors i.e. quorum shall be part of the minutes of the meeting.

14. Announcement of summary of decisions.—At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority. The draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes. The minutes shall disclose the particulars of the directors who attended the meeting through videoconferencing or other audio-visual means.

15. Circulation of draft minutes of meeting.—The draft minutes of the meeting shall be circulated among all the directors within 15 days of the meeting either in writing or in electronic mode as may be decided by the Board. Every director who attended the meeting, whether personally or through videoconferencing or other audio-visual means, shall confirm or give his comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the draft minutes, within 7 days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed. The minutes of the next meeting of the Board shall include the point relating to circulation of draft minutes and comments received from directors.

16. Signing of the minutes of meeting.—After completion of the meeting, the minutes shall be entered in the minute book (as specified under Section 118 of the Act) and signed by the Chairperson. The minutes of the next meeting of the Board shall include a point relating to noting of minutes of previous meeting of the Board of Directors.

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