With the announcement that The Apprentice is soon to return to our screens, it got us thinking at Ferguson Legal about meetings, and ‘the boardroom’. How often should company’s hold board meetings? Is there a set rule? Does Lord Sugar conduct his meetings in the usual manner? Do companies have meetings for the sake of having a meeting?
The reality is a board meeting should be conducted whenever you need to take a decision which requires board approval. To some extent, this will depend on the company’s articles of association and how much authority has been delegated by the board to other personnel. It is also essential to hold a board meeting whenever any Director requests one.
In practice, at least one board meeting should be held annually to approve the annual accounts. As a director, you also need to ensure that the number of board meetings you have (and the matters on the agenda and the way the meeting is conducted), show you are complying with your duties as a director – for example, that each of you is promoting the long-term success of the company and exercising independent judgement. Most companies hold regular board meetings – quarterly or monthly – to review management accounts, discuss strategy and so on.
Of course, these meetings can be supplemented by informal meetings of some or all of the directors for discussions where formal board approval is not required.
If you cannot physically attend a board meeting, then some articles of association allow directors to take part by telephone or videoconference, or for decisions to be made by every director signing an identical ‘written resolution in lieu of a meeting’ rather than attending a meeting.
What shareholder meetings are required?
A shareholders’ meeting (called a ‘general meeting’ in the Companies Act) should be conducted if you wish to take any decisions which require the approval of the shareholders. This might include such things as removing a director, issuing new shares, or changing the company’s articles of association.
In addition, shareholders with at least 5% of the company’s voting shares can require the board to call a general meeting for a specific purpose.
Shareholders can also pass decisions by ‘written resolution in lieu of a meeting’, provided they do so in accordance with the rules set out in the Companies Act 2006.
So there you have it, a quick review on the requirements of meetings in business, If you require to #getknowledge on any legal matters within your business please do not hesitate to conduct the team at Ferguson Legal.