The board meeting is an essential part of the startup journey. This is where most decisions are made and guiding principles are established. Just like any meeting, running a board meeting can be tricky. People with different backgrounds and experiences need to have their say while keeping the meeting on topic. If you’re new to the world of board meetings, let’s take a look at what a board meeting is, how to get started and how to run effective board meetings that will benefit your company.
What is a board meeting?
A board meeting is a meeting between the board members (also known as directors) of a company to review the performance of the company and ensure it is on the right direction. Board meetings can also be held to agree on strategic and administrative decisions which can be passed as resolutions. These resolutions will need to be discussed and voted, such as for example the company's budget for the next financial year. Decisions can also be passed by written resolutions outside board meetings. Board members can invite board observers to these meetings on a one-off or regular basis if they feel they can can contribute positively to the meetings.
How often is a board meeting held?
There is no minimum or maximum number of board meetings prescribed by law but the board of directors must meet sufficiently often to ensure that they are satisfying their duties as directors. Board meetings need to be held sufficiently a part for the company to present meaningful metrics and data about the company's growth to directors and this is usually on a quarterly basis. However, board meetings can also be held more frequently and with shorter notice if ever the company requires urgent decision making or resolutions to be passed such as for example during a fundraising process.
Can board meetings be held virtually?
A company's articles of association will usually detail with a board meeting can be held electronically or if the meeting needs to be in person. This is not always practical especially when board directors are based in different geographic locations or if there is a coronavirus pandemic which is why in practice, as long as the directors agree, board meetings can be held virtually.
How do you organise a board meeting?
To organise a board meeting, all directors must be given notice and unless the company's constitution prescribes a period of notice, the period must be fair and reasonable. Agreeing on the dates of the next meetings in advance allows both the directors and executive management to plan appropriately. Planning the board meeting dates for the entire year also ensures that all directors have sufficient notice to organise their schedules.
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How do you run a board meeting?
There are a number of steps which need to be followed in order to run a successful and legally valid board meeting.
Appointing a chair
At the start of the board meeting, the directors must appoint a chair. The chair, is responsible for the leadership of the board, setting the board meeting agenda and finally ensuring that the directors receive accurate, timely and clear information which will ensure effective decision making and smooth board meetings .
A board meeting is valid if quorum is present which means that a sufficient number of directors is present for the board meeting to start. The required number of directors will usually be determined by the articles. A quorum must be present at the start of, and throughout, the board meeting. Without quorum, both the meeting and decisions should be postponed until it is reached again.
The agenda of the board meeting is set by the chair and will usually include a report from the executive management team on the state of the company. The report can include financial, sales, people and technical updates. The agenda can also include items which need to be voted by the directors, such as a budget or key hiring decision.
A board resolution can usually be passed by a majority of the directors unless the company's articles specify otherwise. When voting, board directors must not have any conflicts of interest with the item being voted and withhold themselves from the vote if they do have a conflict.
According to section 248(1) of the Companies Act 2006, every company is required to take minutes of all proceedings at board of directors meetings. Board minutes should accurately record the resolutions and decisions in order to provide evidence that the meeting was held, remind participants of the actions they agreed to take and enable board members who were unable to attend to understand what took place.
Draft minutes are usually agreed with the chair after the board meeting before being circulated to other directors for comment. The following template can be used for board meeting minutes:
- The company name, number, the date, location and start time of the meeting
- The location of the meeting and if it is held in person in the board room or remotely
- The names of directors present at the meeting including if they attended in person or virtually
- The names of directors who did not attend and sent apologies
- The name of the director acting as chair
- Whether a quorum is present.
- The names of any others in attendance, such as the company secretary and any other invitees.
- Approval of the minutes of the previous meeting
- Any declarations of conflicts of interest or authorisations of directors' conflicts
- Items discussed or approved at the meeting
After a board meeting
Companies of any size need to work with their board to grow the company because directors are required to make key decisions such as fund raises and mergers and acquisitions. The CEO and executive management of the company must therefore be aligned with the members of board so that they can work towards their goals and hit their targets. The CEO of the company should also check in with the board directors to provide updates and keep them in the loop so that there are no surprises at board meetings and so that they can provide you with strategic guidance on how to overcome potential obstacles.
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The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.