Requirements and Benefits of Board Meetings.

The modern day business world is fast moving and widespread. As a result it is often difficult for directors to meet at the same time or place to discuss important business matters. In turn, meetings of the board are often neglected, which can lead to issues arising within a company.

What is a board meeting?

A board meeting is an official meeting between the board of directors of a company.

It is best governance practice for a business that has multiple directors to hold regular official meetings. These meetings are designed to allow for important business matters to be discussed and agreed collectively.

Board meetings are vital if you have more than one director because directors have a legal collective responsibility and are held responsible as a group for their actions as a whole.

What’s the difference between a general meeting and a board meeting?

It is important to know the difference between a board meeting and a general meeting.

Whereas board meetings are focused on the decision making by a board of directors and happen far more frequently (usually quarterly), a general meeting is often focussed on decision making by members (shareholders), and tends to occur annually or bi-annually at most.

On top of the differences in frequency, formality and personnel, there are also differences in the type of content that is discussed. Typically, Board meetings are geared more towards making decisions on strategic and operational issues such as management structures or financial performance.  General meetings often concern broader company issues such as approval of significant business transactions and the election of new directors.

What are the Legal requirements for a board meeting?

Unlike the general meetings, board meetings are almost completely unregulated by the Companies Act 2006. The only legal consideration for board meetings is that it is a requirement that ‘minutes’ are taken.  Directors can be held criminally liable for non-compliance so getting it right is crucial.

The Companies Act 2006 mandates that accurate minutes of the meetings should be kept on file for 10 years. Failure to do so is punishable by fines, or, if there is specific director responsibility, criminal charges could be brought against the negligent director.

Typically minutes are kept in written or electronic form and they can be inspected by directors and auditors at any time. However, the likes of creditors, general public and members are not allowed to inspect them.

Whilst board meetings are largely unregulated, directors are legally required under s172 to follow the company’s articles which normally account for:

• Collective and majority decision making.
• Conduct in calling a directors’ meeting.
• The attendance of participants or ‘quorum’ of the meeting.
• Conflicts of interest.
• Keeping records of decisions.

The Governance team at Goodwille can offer advice and assistance in good governance practice and making sure that meetings, and the associated minutes, remain compliant.

What are the benefits of a board meeting?

There are so many benefits to holding regular board meetings.

Making sure there is time for all directors to work together and make decisions about key company issues can be a crucial aspect in making sure that you are trending in a positive and successful direction.

Regular meetings will improve communication between board members can help build greater rapport between them, allowing more open and effective communication to take place. As a result, this will often lead to better decision making and more efficiency throughout the board and the organisation.

Board meetings also improve transparency and accountability. The minutes record an accurate account of the meeting and any actions and decisions agreed meaning it is far more likely things are acted upon.

The regularity and structure of the meetings will serve as a point of reference for each member to make sure that any issues, that were previously discussed, have been properly considered or resolved before the next gathering.

Finally, having these meetings in place can help provide improved governance foundations for a company. It allows for a company to plan more strategically and manage risk. It also provides potential recruits and stakeholders the perception that the company is formal and responsible in its approach to business.

Where should board meetings take place?

Unless specified in your articles of association, directors do not have to be physically present in one location.  Although it’s often best practice for board meetings to be held physically, it is has become increasingly common to conduct them remotely.

How Goodwille can help with Board Meetings…

With the rise of ESG regulation, holding regular board meetings is becoming increasingly important to companies. They provide an opportunity to ensure that all board of directors are regularly present and communicating in a structured environment.  As a result, this leads to better communication, governance and accountability.

Goodwille can act in an advisory capacity to make sure that your board meetings are fully compliant.

If you would like to reach out to us to better understand, and find out how to get assistance with Board Meetings (or any other governance matters), then please contact our Head of Governance, Philip McCarron. Further still, If you would like assistance in setting up a UK entity get in touch with our Marketing Manager James Service.