COVID-19: Can we hold remote board meetings where the Articles of Association do not expressly allow for it?
It is usual for recently adopted Articles of Association to include a provision that board meetings may be conducted electronically. Indeed, Article 10 of the model Articles of Association for private companies and Article 9 of the model Articles of Association for public companies contain such a provision. Companies who have older articles, perhaps based on Table A 1985 or earlier versions, are unlikely to have such an express provision.
There has long been a split in legal opinion as to whether a board meeting can be held by telephone or other electronic communication where this is not specifically set out in a company’s Articles of Association. In recent years, it does seem to be the majority view that a directors’ meeting can be held by telephone or some other sort of electronic communication provided that the existing Articles of Association for the company do not preclude such a method for the board meeting. There is however no definitive English case law on this point.
If a board meeting is to be held electronically:
- Check the company’s existing Articles to see that holding a board meeting in this way is not expressly prohibited (if it is you may wish to consider changing the Articles of Association to allow for remote board meetings during this time);
- If it is not, then all directors who are entitled to receive notice should give their express consent that they are happy to hold the meeting in this this way e.g. they could do this for example by sending an email to the company secretary (or to the other directors) saying that they are happy to conduct the board meeting in this manner;
- Whatever method for holding a remote board meeting is used, it is important that each participant can hear the other participants at the meeting;
- Once the meeting has finished, the board minutes should be circulated to each director for approval so as to provide evidence that each director agrees that it is a correct record of the business which was transacted during the meeting.
The Chartered Governance Institute has published some useful guidance on holding virtual board meetings which can be downloaded here.
The above does not constitute legal advice nor is it a complete list of matters to consider when holding a board meeting. Should you have any queries, please do not hesitate to call Theresa Grech on 07849 834082 or email her on TheresaGrech@incegd.com or contact your usual corporate contact at Ince.