A guide to conducting board meetings

The board of directors is responsible for managing the day to day running of a company under the company’s rules.

This guide explains how to properly hold a board meeting for a private limited company incorporated in Ireland (LTD) according to the Companies Act 2014 (CA 2014).

The guide also covers the use of directors’ written resolutions as an alternative to board meetings, the management of meetings by sole director companies and the rules about virtual meetings.

Additionally, the guide explains the process of calling a board meeting, including the required notice, who needs to receive it, notice period, format, and content, as well as the role of the chairperson, procedures for voting, and the minimum number of directors needed to hold a meeting.

It also briefly addresses rules regarding directors’ conflicts of interest.

 

Introduction

 

Directors usually manage a company by:

• Holding board meetings in person, virtually, by telephone or a combination of these.
• Passing resolutions in writing.
• A combination of the above.

Except if disapplied by the company’s constitution (which would be highly unusual), the company’s business is managed by the directors, who are empowered to exercise all the company’s powers not required to be exercised by the members (shareholders).

The directors are also free to delegate their powers to anyone they think fit.

Unless the directors make decisions by resolution in writing, the directors’ powers must usually be exercised by the board collectively at a properly convened board meeting.

In circumstances where directors pass resolutions at an earlier adjourned meeting, the directors should, for the avoidance of doubt, confirm that the resolutions are passed on the date to which the meeting was adjourned.

Key points about board meetings

• Directors need to meet regularly to fulfil their duties.
• Directors can hold formal board meetings as outlined in the company’s rules or default provisions in the CA 2014.
• Informal board meetings are allowed if all directors agree and the company’s rules permit it.
• Virtual board meetings are permitted in Ireland, allowing directors from different locations to participate using electronic communication.
• In Ireland, companies with a single director can hold valid board meetings, pass directors’ resolutions, or combine both.
• The chairperson has the casting vote if there is deadlock.
• Board resolutions can be agreed upon in writing without the need for a formal meeting if there is unanimous agreement.

Obligations to meet

No minimum number of board meetings is prescribed by law but directors must meet sufficiently often to ensure that they are discharging their duties as directors.

The CA 2014 simply states that company directors may meet to conduct business, adjourn, and otherwise regulate their meetings as they think fit.

 

What is a meeting?

 

Formal Board Meetings

This is a board meeting that has been properly called and held under a company’s constitution or the default provisions in CA 2014.

Most companies manage their affairs through regular, properly called board meetings.

Informal Board Meetings

Provided the constitution does not preclude it, boards may act informally if they are unanimous.

The management and administration of smaller private companies, in particular, are often relatively informal.

However, too much informality can be dangerous.

Virtual Meetings

Board meetings can also be held virtually.

Unlike shareholder meetings, virtual board meetings are specifically catered for by the CA 2014.

It provides that a directors’ meeting may consist of a conference between some or all of the directors who are not all in one place, but each of whom is able (directly or using telephone, video or other electronic communication) to speak to each of the others and to be heard by each of the others and:

A director participating in such a conference shall be deemed present in person at the meeting, entitled to vote, and counted in a quorum.

Such a meeting shall be deemed to take place:

• where the largest group of those participating in the conference is assembled;
• if there is no such group, where the chairperson of the meeting is; or
• if neither applies, in such location as the meeting itself decides

Unless expressly excluded or modified by a company’s constitution, this provision will apply.

 

Sole Director

 

Limited companies in Ireland can have just one director.

However, a company secretary (who can be a corporate body) is required for all companies, so even if the company is a sole director, it must still have a designated company secretary.

A sole director may also act as the company secretary of an LTD in Ireland.

A sole director can hold a valid meeting.

Where a company has just one director, one is a valid quorum.

Therefore, sole director companies in Ireland can either hold board meetings, pass directors’ resolutions, or use a combination of both.

 

Calling a Board Meeting

 

A director may, at any time, call a director’s meeting.

This provision can be excluded or modified by a company’s constitution.

Notice of Meetings

All directors have the right to receive reasonable notice of any meeting.

However, the directors can decide that it’s unnecessary to give notice to any director currently not in Ireland despite being a resident there.

Even if a director previously said they couldn’t attend a meeting, they still need to be notified.

If the directors meet regularly, like every week or month, they might not need specific notice of each meeting.

But it’s typically best to give written notice for every meeting to be on the safe side.

If you do need to give written notice you’ll find our notice of board meeting template helpful.

Notice Period

There’s no set notice period for board meetings.

If the company’s rules don’t specify a notice period, it should be reasonable based on the situation, including the importance and urgency of the matters being discussed and the board’s usual practices.

Most company rules don’t set a notice period to give directors flexibility.

It might be reasonable to give no notice in urgent cases, but considering today’s communication methods, this should be a rare occurrence.

Form of Notice

A written notice should be given to ensure everyone knows about a board meeting, although a verbal notice might work too.

If there’s nothing in the constitution about whether a verbal notice is valid, it might depend on what the board usually does.

Before sending a notice by email, it’s important to check if the constitution has any rules about when notice is considered to have been received.

When sending notice by email, there’s a higher chance that a director might claim they didn’t get the notice and that the meeting wasn’t properly arranged.

To avoid this, the sender might ask for a reply to the email, send the email to more than one address, and ask for delivery and read receipts.

They might also send a hard copy by mail to confirm the email was received.

Contents of Notice

The notice for a meeting must say where and when the meeting is happening.

There is no general rule requiring the notice to state what will be discussed at the meeting.

However, it’s a good idea to include an agenda.

If the person calling the meeting chooses to describe what will be discussed, it has to be a fair description so that the directors can decide whether to attend.

The constitution often requires the notice to include the proposed date and time of the meeting, where it will be, and, if the directors won’t all be in the same place, how they will talk to each other during the meeting.

If a director hasn’t had proper notice of a meeting, the decisions made at the meeting might not be valid. If a director has a problem with a meeting being called too suddenly or without proper notice, they must say so immediately.

You can find our notice of board meeting template here

 

Chairperson

 

The directors can choose one of themselves to be the chairperson of their meetings if they want to.

If they don’t, or if the chairperson isn’t there 15 minutes after the meeting was meant to start, the directors who are there can choose one of themselves to be the chairperson.

The constitution usually provides for the appointment of a chairperson and often says that the directors can choose one of themselves to be the chairperson, can change the chairperson at any time, and if the chairperson is late, the directors who are there must choose one of themselves to be the chairperson.

Being chairperson means ensuring there are enough people at the meeting, keeping things in order, ensuring the meeting deals with what it’s intended to do, and making decisions about whether a director can do something at the meeting.

Check out our helpful guide on the role of a chairperson to garner more insights into the role.

 

Quorum

 

Company rules can set the required number of directors needed to conduct business meetings.

If not, the default requirement is two directors or just one director if the company is a sole director company.

A quorum must be present at the start of and throughout the meeting.

If a quorum is not present, business cannot be conducted, and decisions will be invalid.

The remaining directors can take action to increase their numbers, i.e. appoint another director so that the quorum is reached, or call a general meeting.

Decisions made at a meeting without the required number of directors may be validated at a subsequent meeting with the proper number of directors.

This validation protects third parties, but some agreements are not protected.

 

Voting

 

A constitution will usually provide that resolutions will be passed by a majority of those present and voting.

The general rule is that each director has one vote at all directors’ meetings.

The CA 2014 does not expressly preclude directors from having more than one vote.

However, the conferment of weighted voting on directors under a company’s constitution is thought to be problematic and could be found unlawful.

The chairperson has a second or casting vote where votes are tied.

It is common practice for board decisions to be reached by consensus without a formal vote.

Once the board has passed a proper resolution, it is the duty of all the directors, including those who took no part in the deliberations and those who voted against the resolution, to implement it.

 

Conflicts of Interest

 

Directors have a fiduciary duty to avoid conflicts of interest.

The directors can also be released from the duty to avoid conflicts by the company’s constitution.

The CA 2014 includes optional governance provisions, which apply as statutory defaults in a company’s constitution unless disapplied.

These optional provisions include several situations where directors are released from their duty to avoid conflicts of interest, such as allowing directors to:

• Vote in favour of a contract in which they are interested.
• Exercise the voting power attached to shares owned by the company.
• Hold an executive office in the company.
• Be included in the quorum about a meeting to consider appointing that director to an office and determine the terms and conditions.
• Be an officer of a company promoted by the company.
• Act in a professional capacity for the company.

Companies will usually specifically provide for these issues in their constitutions.

For example, the constitution could state that directors may hold additional directorships and do not need to disclose confidential information obtained through those other directorships.

 

Written Resolutions

 

If the directors are likely to agree to a proposed resolution, it may be convenient to pass a written resolution instead of convening a board meeting.

This is allowed under the Companies Act unless your company’s rules, i.e. your constitution, say otherwise.

Most companies don’t exclude this right.

Unlike a shareholders’ resolution, which can be passed by a majority, directors’ resolutions in writing must be unanimous.

However, the CA 2014 does allow directors’ resolutions to be validly passed if, for example, a minority of directors could not sign the resolution because of a conflict of interest or other provision in a company’s constitution which might preclude a director from voting on a particular matter.

Should that arise, the resolution must state the name of each director who did not sign it and the basis for their non-signing.

You’ll find a series of resolution templates for you to choose from in our resolutions hub.

 

Minutes

 

Taking board minutes is a legal requirement.

It is the general view that the company secretary is responsible to the chairperson for preparing and retaining board minutes.

Every company is required to take minutes of:

• All appointments of officers made by its directors.
• The names of the directors present at each meeting of its directors.
• All resolutions and proceedings at all meetings of its directors.
• Depending on the importance of the resolution, contain the thought process that led to them being made.

As a general rule, minutes should record “decisions, not discussions”, and therefore, while decisions must be recorded, deliberations may be recorded.

Ultimately board minutes should provide evidence that the meeting was held and what business was conducted.

Bear in mind that once the chairperson has authenticated the minutes, it could be very difficult to prove that they are incorrect.

Minutes shall be entered in the company’s minute books as soon as possible after the appointment is made, the meeting concerned has been held, or the resolution concerned has been passed.

If the company fails to comply with this requirement, every officer in default commits an offence.

Check out our useful guide to board minutes for more insights and guidance.

And if you need a template for board minutes, we have you covered for that too.

Board minutes template

You might also want to consider having a meeting agenda

Of course board meetings relate to the directors only.

There is also a requirement for companies to hold annual general meetings (AGM) and shareholder meetings may also be required to discuss changing issues that are decided by shareholders and require specific resolutions.

To find out more about shareholder meetings check out our guide to shareholder meetings for small business