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Can any director call a board meeting?

Yes, subject to the articles, any director can call a board meeting and the company secretary must do so if instructed by any director.

What period of notice is required for a board meeting and in what form must the notice be given?

It is possible that articles may give instructions on these matters but in the absence of this, reasonable notice must be given. What is reasonable notice depends on individual circumstances. If all the directors are readily available, it is probable that a very short period of notice is all that is required, perhaps just a few minutes. If the directors are widely scattered and very busy, a longer period would probably be reasonable. Unless the articles say differently, there is no requirement that notice be given in writing or indeed in any other particular manner.

May a person who is not a director be allowed to attend a board meeting?

Subject to the articles, yes - and it does often happen, either for a whole meeting or just part of it. Employees not on the board and consultants are just two examples of people who might attend. Such people are there by invitation of the board and the invitation may be revoked. Minutes should state the names of people who were present and state that they were there in an advisory capacity, and indeed give details of the advice that they gave. In no circumstances whatsoever should they vote or count towards a quorum.

There is a risk that attendance at board meetings could be a factor leading to a person being a de facto director or a shadow director, but if this advice is followed it should not happen. Professionals, such as insolvency specialists usually know the risks and insist on acting in the way described.

Can a valid board meeting be held without all the directors being in the same place?

Yes it can and it is quite common. As with so many things the articles are important. The new model articles say that directors' decisions may be a majority decision at a meeting or unanimously when directors indicate to each other, by any means, that they share a common view on the matter. The new model articles also say that provided that each director can communicate to the others any information or opinions that they have, it is irrelevant where each director is and how they communicate with each other. This allows telephone conference calls and real time email communication. Whether it allows exchanges of e-mails over a period is a matter that will have to be tested, but it may well not do so.

Can a board meeting be held without all the directors being informed?

Subject to the articles the answer is no in most circumstances. However, Reg. 88 of Table A provides that it is not necessary to give notice to a director who is absent from the United Kingdom. The new model articles provide that notice must be given to each director, but need not be in writing. There is no exception mentioned for directors absent from the United Kingdom. Giving notice should of course be interpreted reasonably, such as writing to directors at their notified residential addresses, and the period of notice should be reasonable in the circumstances. It is not open to a director to prevent board meetings being held by taking a long holiday and not leaving a forwarding address.

It is not absolutely clear what is the extent of a director's rights if a meeting is held without him being informed. It is probable that his right is to seek a second meeting. If he does not do this within a reasonable time of discovering that a meeting has been held, the business conducted at the meeting will stand.

How frequently should the board meet?

There is no single correct answer to this question. However, all companies, even dormant companies, must have at least one board meeting a year. This is because all companies' accounts must be formally approved by the directors - though this, like any other business, may be done by means of a written resolution. Certain other things also require a formal board decision, though they may not be done in a particular year or indeed at all. Apart from this it is a matter for the directors. Some boards meet relatively infrequently and reserve board meetings for formal business, with the day to day running of the company left to the managers or to the directors working outside the structure of formal board meetings. In other companies the directors meet frequently and actively run the company through these regular meetings.

Can a formal board meeting ratify the business done at an informal meeting?

Yes it can. This was established in the case Re Portuguese Consolidated Copper Mines 1889.

I am sure that there have been many interesting cases about board meetings. Would you tell me about one of them?

Certainly - you are almost bound to find Barron v Potter 1914 interesting. A company had just two directors and they met by chance at a railway station. Following a casual conversation one director, against the wishes of the other, decided that it had been a board meeting and acted on that basis. It was held that it was not a valid board meeting.


I have read the questions and answers in this section about board meetings and in many respects my board does not operate in the required way. Does it matter?

You are not the first person to make this observation and you will probably be aware that in practice many of the requirements are disregarded in some companies - perhaps as a deliberate intention and perhaps due to ignorance. Does it matter? - maybe. The first point to make is that you very probably want to comply with the law, your articles and good practice. You would expect this book to advise you to get it right and that is indeed the advice offered. The second point is that in some cases the rules may actually be being followed. A conscious decision to accept irregularities may perhaps legitimize them. On no account should this argument be stretched too far. You (and others) should know the requirements so that any decision to disregard them is a conscious one and not an unconscious one.

When a requirement is disregarded it is sometimes said 'who knows and who cares?', to which the answer may be 'very few and no-one'. Often no harm is done so long as no-one complains, but do not depend on this too readily as complaints may be raised later. It is not unknown for vengeful former spouses to seek revenge, and directors may be friends at the time but fall out later. If the company is or becomes insolvent, it may matter a great deal. It may cause problems with due diligence if the company is later sold. Of course some irregularities are more serious than others and some are unacceptable in any circumstances.

Irregularities are least likely to be acceptable in listed companies, and they are very undesirable in certain types of company, charities being an example. They are perhaps most likely to be tolerated in a small private company where the directors trust each other and are the major shareholders. Even in a company such as this the rights of minorities should be respected.

 
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