Company Directors - Good Board Meetings

Summary

Highlights

• Company directors need to know their articles as these can vary greatly from company to company 📄.
• It's crucial to keep minutes of the meetings for at least 10 years as required by law 🕒.
• Board meeting dates should be scheduled in advance, preferably a year prior 📅.
• Avoid interruptions during meetings to maintain focus and productivity 🔕.
• Documents should be circulated well in advance to ensure efficient meetings 📂.
• Having an effective chairperson is vital for the meeting's success and productive discussions 🪑.

Key Takeaways

• Understand and adhere to your company's articles to guide your board meetings 📚.
• Keep accurate minutes as required by law, typically organized by the company secretary ✍️.
• Plan board meeting dates well in advance to help with scheduling 🗓️.
• Minimize interruptions during meetings for maximum effectiveness 🚫📞.
• Distribute important documents beforehand so directors can prepare adequately 📄.
• Ensure that a competent chairperson leads the meeting to harness productive discussions 👩‍💼.

Overview

Chapters

• 00:00 - 00:30: Statutory and Case Law on Board Meetings The chapter discusses the statutory and case law regarding board meetings. It notes that while there's limited statutory law, there's a significant amount of case law. A particular point of emphasis is the requirement under the company's act that minutes of board meetings must be taken and retained for at least 10 years. Typically, the company secretary, if available, handles this task, but ultimately, the directors are responsible.
• 00:30 - 01:00: Importance of Articles in Board Meetings The section begins by highlighting the responsibility of ensuring actions are completed in board meetings. The focus is on discussing the significance of articles in these meetings. Articles differ significantly, and directors must be familiar with their specifics. The default, or model, articles apply unless they have been specifically altered during the company's formation.
• 01:00 - 01:30: Practical Tips for Board Meetings The chapter titled 'Practical Tips for Board Meetings' discusses the importance of being familiar with the company's articles during board meetings. There is a conversation among the participants about the lack of familiarity with the articles and the need to have them readily available. One participant suggests photocopying the articles for each director and reviewing them collectively. It is emphasized that the articles, which can vary greatly, should be adhered to in board meetings.
• 01:30 - 02:30: Understanding Quorum and Voting The chapter titled 'Understanding Quorum and Voting' provides insight into how organizations can largely set their own rules regarding meetings and decision-making processes. It emphasizes the importance of having a quorum, which is the minimum number of directors required to conduct a meeting. The chapter hints that while notice rules may not be rigid, all directors should have adequate notice of meetings.
• 02:30 - 04:00: Alternative Meeting Formats The chapter titled 'Alternative Meeting Formats' discusses the dynamics of decision-making within boards, particularly with a small number of directors. It highlights the possibility of delegating responsibilities to a committee, although this practice might be unlikely with only three directors. The directors have the authority to choose the chair, and this position likely has the power of a casting vote. In cases where directors disagree, the viewpoint of the majority is likely to prevail.
• 04:00 - 05:30: Suggestions for Good Board Meetings The chapter titled 'Suggestions for Good Board Meetings' explores the nuances of decision-making within board meetings. It discusses how a director can be outvoted by others, regardless of their share percentages, emphasizing that such a move may not always be advisable. The narrative also highlights the potential for written agreements among directors without the need for a physical meeting, provided unanimous consent and signatures are obtained. Furthermore, the possibilities and conditions under which telephone or email board meetings might be acceptable are also touched upon.
• 05:30 - 08:00: Scheduling and Preparation of Meetings The chapter titled 'Scheduling and Preparation of Meetings' discusses the provisions for holding real-time electronic board meetings, as allowed by the latest model articles, although these may not apply to every company. It emphasizes the importance of understanding and following the specific articles governing your company, while acknowledging that many boards tend to overlook these rules without consequence. Ultimately, it suggests making informed decisions about adherence to these regulations.
• 08:00 - 10:00: Role of the Chair in Meetings The chapter discusses the role of the chair in board meetings. It observes that many boards do not actually vote but follow consensus or the direction set by the most influential member. The author shares personal insights rather than legal guidelines on what constitutes a good board meeting, mentioning that these are subjective principles that can be debated. The author is about to outline five key aspects of an effective board meeting, beginning with the importance of setting and sticking to scheduled dates.
• 10:00 - 11:00: Conclusion and Moving to Next Topic The chapter discusses best practices for conducting board meetings effectively. Key recommendations include minimizing interruptions, preparing thoroughly, circulating documents beforehand, and assigning a competent chairperson to lead the meetings. The frequency of these meetings is flexible, depending on the company's culture and needs. Some companies prefer frequent formal meetings, while others opt for a more informal approach.

Company Directors - Good Board Meetings Transcription

• 00:00 - 00:30 There's not much statutory law about board meetings, although there's quite a bit of case law. I must mention one thing, and that's the minutes. The company's act says minutes must be taken and kept for at least 10 years. It's normally the company secretar's job if there is one. But the overall responsibility is the directors. They
• 00:30 - 01:00 must do it or see that it's done. Having made that clear, I'm going to talk first about the importance of the articles and then move on to what makes a good board meeting. Articles vary a lot and directors should know what their articles say on this and on other matters. The model articles in forced when your company was registered will apply to the extent that they have not been modified for your company. This can be done when the company is formed or by
• 01:00 - 01:30 the shareholders later. Are you all familiar with your articles? No. No. Oh, that's a shame. Have you got copies of your articles somewhere? I'm not sure I can put my hands on them, though. I do have a copy on the file. Can you photocopy a set for each director and can we all spend some time looking at them later? Yes, thank you. Whatever your articles say, you should follow them. Articles vary enormously
• 01:30 - 02:00 and I don't know what yours say, so there's no substitute for having a look. I can tell you though what you're quite likely to find in your articles. First, the good news. It's likely that to a large extent you can make your own rules. There will be something about a quorum. You can't have a meeting unless a certain number of directors are there. There's probably no special rule about notice, but everyone should have a
• 02:00 - 02:30 chance to be there. You can probably delegate to a committee, though this board with only three directors probably would not do that. It's very likely that the directors can choose the chair and they can change their mind and the chair probably has a casting vote. It's very likely that if the directors do not agree, the majority view will prevail.
• 02:30 - 03:00 Does that mean that I can be outvoted by James and Jenner acting together? Yes, it does mean that. And it would still mean that if even if you owned 100% of the shares. Probably wouldn't be a good career move for them though. It's very likely though that the directors can unanimously agree something in writing without actually holding a meeting. Everybody's got to sign. However, can we have telephone or email board meetings? Telephone board meetings could probably be okay subject to conditions. It does need to be a
• 03:00 - 03:30 conference call. The latest model articles do allow realtime e board meetings subject to conditions of course, but th those model articles might not apply to your company. You really have to look at your own articles. I do of course realize that many boards ignore everything that I've just said and usually no harm is done. But you should know the rules and if you don't follow them then it's an informed decision. In particular, I know that
• 03:30 - 04:00 many boards never have an actual vote. Either a consensus emerges or the person in the strongest position says, "This is what we're going to do." Let's move on to what makes a good board meeting. Nothing that follows is the law. They are my ideas. You might agree or disagree. They're rather like my principles. If you don't like them, I've got others. Let's look at my five points. dates fixed well in
• 04:00 - 04:30 advance. Get away from interruptions. Prepare well and circulate documents in advance. Ensure the minutes are taken and have an effective chair. Can I just ask how many board meetings we should have each year? The answer is as many or as few as you want to have. Companies vary. Some directors run the company through frequent meetings. Others do it more informally and just
• 04:30 - 05:00 have occasional meetings for formal business. Every company must have at least one meeting a year, even a dormant company. That's to approve the accounts and it's a legal requirement. Now, getting back to the five points. First of all, I think it's important that you schedule the dates of the board meetings a long time in advance, perhaps a year or more in advance. It's not binding and you can change it later. It is important and it helps non-executive directors
• 05:00 - 05:30 particularly. We already do that. It helps people book holidays and make other business arrangements. Yes, it's at 10:00 on the first Tuesday in each month. Oh, excuse me. Hello. Yes, it's on BBC 1 at 3:00. Can you record it for me, please? Look, I'm sorry. I've got to go. I'm in a meeting. Okay. I'll speak to you later. Bye. Sorry about that. That brings me on to my second point. You probably don't have many board
• 05:30 - 06:00 meetings and they're likely to be important. You want to know if the building's on fire or the prime minister's in reception, but generally speaking, try to avoid interruptions. Everyone should do their homework and prepare for the meeting. The agenda and any papers for the meeting should be circulated well in advance. I mean, director's reports, budgets, management's accounts, things like that. You won't get the best results if they're sprung on the directors at the meeting. Does your
• 06:00 - 06:30 board do that, Ashley? Yes and no. Diana gets the financial stuff to us out well in advance, but other things often come out at the meeting. I'd say five out of 10 could do better and will do better starting ahead of next Tuesday's meeting. The next item on the agenda, finally have a good chair of the meeting. This is perhaps the most difficult because the other things can be achieved by rules and this is a matter of style. Different styles suit
• 06:30 - 07:00 different people and different boards. I've worked for more than one autocrat. Sometimes it works well and sometimes it's a disaster. Whatever the style, the chair should be efficient and try to get the best out of his or her colleagues. Everyone should be allowed to put their point of view, but not to waffle on for too long. Okay, I think we're all clear about what we'll need to bring to the next meeting. Yes. Shall we move on to the next topic?
• 07:00 - 07:30 Okay.