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Good board meetings

Can you suggest a good system for the scheduling of a board meeting and preparation for it?

It is a matter of opinion but there are considerable advantages in scheduling the dates a long time in advance, perhaps a year or more in advance. This helps the directors, especially non-executive directors, book holidays, schedule other meetings, etc. The dates could be individually selected or they could be something like '10.00 am on the first Tuesday in each month'. Listed companies invariably schedule board meetings in this way. The board should normally keep to the scheduled dates, but they can be changed later. If necessary, an emergency meeting can be arranged at short notice.

Good meetings often depend on good preparation so the agenda and supporting papers, such as reports, management accounts, etc, should be circulated in good time. It may be necessary for the chairman to be firm about this because some directors may not co-operate, although they are likely to agree in theory. Of course exceptions can be made for emergencies, but not too many of them should be allowed.

Have you any other suggestions that may help facilitate good board meetings?

Once again it is a matter of opinion and many disagree, but some degree of formality is desirable. Directors should respect the authority of the chairman and occasionally, if necessary, be required to do so. Of course, the chairman should have the personal qualities that deserve respect. Meetings should be held around a boardroom table rather than with the directors sitting on sofas or something similar.

The directors should try hard to remove themselves from interruptions and meeting away from company premises can help. Staff should know that interruptions will only be tolerated in very exceptional circumstances. The death penalty should be mandatory for not switching off a mobile phone. If there are thirteen directors and one takes a ten minute phone break, a collective two hours are wasted and the quality of the meeting is diminished.

We hardly ever have a formal vote at our board meetings. Have we got it wrong?

First of all let's be absolutely clear, subject to the articles the majority decides. Any director is entitled to insist on votes being taken, even if they result in him being in a perpetual minority of one. That said, practices vary according to the wishes of the directors and the dynamics of the board. It can make a big difference if there is a dominant person on the board, perhaps because he owns many or all of the shares.

Sometimes a vote is not taken because the directors are obviously all of the same mind. In this case the chairman just states the decision which is minuted. Sometimes a vote is not taken because, although there is not unanimity, it is clear what the majority want and a formal count is not necessary. Once again the chairman states the decision which is minuted. You may be familiar with a board where a dominant personality states what he has decided, either with or without listening to points of view. The other directors then acquiesce in his decision. By doing this they are in effect asserting their rights to be 'yes men'. Finally there are boards where the chairman guides the board to a genuine consensus that may or may not end in a formal vote.

There are things to be said for and against all of the dynamics described, though dictatorship tends to be more attractive if you are the dictator. President Abraham Lincoln once submitted a proposal to his cabinet and found that everyone was against him. He called a vote and announced the result as "The ayes one, the noes eleven, the ayes are in the majority".


 
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