BOARDROOM BEST PRACTICES

5 Essential Board Meeting Procedures

A well-run board meeting is a sign of a high-functioning board that is serving the best interests of the organisation. That’s why following robust board meeting procedures is essential. Adopting recognised meeting protocols ensures directors are well-prepared and that their time and talents are used effectively. Aligning with correct procedures also guarantees that votes are held legally, by a verified quorum of directors, so there is less risk that they will be challenged in future. Further, it ensures that the meeting has a proper legal record on which the organisation can rely for future reference and, if required, in a court of law.

In the UK, board meeting procedures are largely a matter of convention, rather than law. The basic elements, such as how to call a meeting, voting procedures and quorum requirements are normally set out in the organisation’s articles of association.

Protocols for debate in the meeting itself are typically loosely based on the parliamentary procedures that have been used in Westminster since the 16th century. Despite their age, these procedures continue to be used because they are an effective means of facilitating robust, fair and democratic debate and decision-making.

To be effective and adhere to protocol, boardroom meetings must follow five essential procedures, detailed below. The first of these starts well before the event itself:

1. Serving Proper Notice of Board Meetings

Board directors must receive adequate notice of the date and location of the meeting, so they have time to prepare and plan to attend. The minimum notice period and the required method of notification is usually stated in the company’s articles. If not, it is good practice for the board to agree a minimum period and adopt it as protocol.

Directors should also receive the board meeting materials well in advance of the meeting date, to give sufficient time to review them. Being prepared for board meetings is central to a director’s duties; they must be fully informed before taking part in discussions and voting on resolutions. If directors do not receive board meeting materials in good time, the effectiveness of the board is at risk. Meetings materials are highly confidential and should be distributed through a secure channel such as Diligent Boards.

2. The Question of Quorum

It is not always possible for every director to attend every board meeting. But there must be a minimum number to ensure that votes are valid and that there is no risk of a tie, which would prevent the board from performing its duty as a corporate decision-making vehicle. The minimum number of directors required to form a quorum should be listed in the company articles. It is usually set at two-thirds of the full board.

Directors do not always have to attend in person—something that has become particularly relevant during the COVID-19 outbreak. However, authorisation for boards to meet virtually, or for a mix of in-person and remote attendance, must be given in the company’s articles. If no such provision has been made, virtual meetings or remote attendance are off the agenda until the articles can be amended to permit them.

3. Enable Effective Debate and Challenge

The agenda provides structure for the meeting. It keeps proceedings on track and ensures each item receives the right amount of time and attention. The meeting typically begins with a call to order from the chair, followed by a rollcall of attendees and notification of any apologies received from non-attendees.

The early part of the meeting deals with factors such as the approval of the agenda and the previous meeting’s minutes, before the main business of the board gets underway. This will vary depending on what the board needs to accomplish during the meeting, but typically includes reports from the executive director, the board’s various committees, financial reports and discussion of specific challenges facing the organisation that the board needs to make decisions on.

As for how the discussion flows, protocols exist here too, based on the parliamentary rules used by governments for centuries. While they seem formal, their function is to allow majority decision-making while also acknowledging the views of the minority and allowing each director the opportunity to share their opinion in a respectful environment.

In short, the rules state:

  • One subject should be discussed at a time
  • One person only should speak at a time
  • All comments must be made through the chair
  • Personal attacks must be avoided during debates
  • Debate must be confined to the topic in question
  • There should be no cross-conversations
  • No lengthy papers should be read during the meeting

The chair should manage the discussion according to these principles to make sure that all viewpoints are heard. In a meeting with an accomplished chair and experienced directors, debate should still be free flowing, as all are familiar with the procedure. In this way, the board achieves the “constructive and challenging” dialogue that the Corporate Governance Code identifies as central to an effective and functioning board.

4. Voting on Resolutions

Votes on resolutions, which indicate the final decision made by the board after its deliberations, must follow the correct protocol as established in the organisation’s articles. If it does not, there is a risk the outcome could be challenged on the grounds of invalidity. It is one of a director’s responsibilities to make sure proper voting procedure is followed and challenge the chair if they believe this is not the case.

Once discussion of a resolution is complete, the chair should announce that voting will begin and read the resolution to be voted on before asking the directors for yea votes—in agreement with the resolution, nay votes—disagreeing with the resolution and abstentions.

The format in which these votes are made depends on the preference of the board. It could be by a show of hands, by voice, by ballot or by a roll call. Boards can also use secure voting technology, such as Diligent Voting & Resolution software, which is particularly valuable when directors are attending meetings remotely.

5. The Official Record: Meeting Minutes

A vital part of board meeting procedure is the recording of accurate minutes. These are the official legal record of the meeting and may be called as evidence if a company ends up in court. Less dramatically, they are a valuable reference point and source of information recording the decisions made by boards and how they were arrived at. They also provide evidence of the contribution of individual directors in their role on the board and list the actions arising from the meeting.

Minutes are generally taken by the company secretary or a nominated person. They are not a verbatim record but instead capture the key discussion points and any dissenting views, the outcomes of votes taken and next actions where required.

Enhancing Essential Board Meeting Procedures

Although many procedures that support well-run board meetings have roots in the past, this doesn’t mean they can’t be enhanced by modern governance tools. Diligent Governance Cloud is designed to help boards fulfil their duties by delivering secure 24/7 access to up-to-the-minute meetings materials and ensuring that voting and minute-taking are accurate, convenient, and transparent. Boards can take the best of the past and augment it with the governance technology of the future to follow best practices and serve their organisations in the most effective way possible.

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