CONDUCTING BOARD MEETINGS THROUGH VIDEO CONFERENCE – PROCEDURE-PROCESS
Section 173of the Companies Act, 2013, provides for the participation of directors in a Board meeting, either in person or through video conferencing or other audio visual means, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.
As per the rules framed under the Act, the following are the compliances for holding/attending meetings through Video Conference.
"Video Conferencing Or Other Audio Visual Means" means “audio-visual electronic communication facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting”.
From the above definition, it is clearly evident that holding of a Board meeting through Video Conferencing or through Audio Video means, is not simply conducting a meeting through skype or a third party video conferencing facility/means.
For the time being, the Companies Act, 2013, restricts for the following matters/decisions of the Board to be dealt by a meeting held through video conferencing or other audio visual means:
- Approval of the annual financial statements; (ii) Approval of the Board’s report;
(iii) Approval of the prospectus;
(iv) Audit Committee Meetings for consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act; and
(v) Approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
NOTE: The Companies Amendment Bill, 2016 (Bill No.73 of 2016), proposes to amend Section 173, by inserting a second proviso to sub-section (2) of Section 173, that, where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means in such meeting on any matter, including the restricted matters.
Process/Procedure for conducting of Meeting through Video Conference and Compliance is as below:
- Notice of Board Meeting:
A meeting of the Board shall be called by giving not less than 7 days in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.
The notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio visual means, and shall provide all the necessary information to enable the directors to participate through video conferencing mode or other audio visual means.
The Notice of the Meeting, wherein the facility of participation through video conferencing mode or other audio visual means, shall clearly mention a venue, whether registered office or otherwise, to be the venue of the Meeting and it shall be the place where all the recordings of the proceedings at the Meeting would be made.
Requirements to participate/attend a meeting through Video Conference:
A director intending to participate through video conferencing or audio visual means shall communicate his intention to the Chairperson or the Company Secretary of the company, if any.
If the director intends to participate through video conferencing or other audio visual means, he shall give prior intimation to that effect sufficiently in advance so that company is able to make suitable arrangements in this behalf.
The director, who desire, to participate may intimate his intention of participation through the electronic mode at the beginning of the calendar year and such declaration shall be valid for one calendar year.
In the absence of any intimation from the Director, it shall be assumed that the director shall attend the meeting in person.
- Arrangements and requirements for/at the Meeting:
The Company shall make necessary arrangements to avoid failure of video or audio visual connection.
The Chairperson of the meeting and the company secretary, if any, shall take due and reasonable care:
- to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures;
- to ensure availability of proper video conferencing or other audio visual equipment or facilities for providing transmission of the communications for effective participation of the directors and other authorised participants at the Board meeting;
- to record proceedings and prepare the minutes of the meeting;
to store for safekeeping and marking the tape recording(s) or other electronic recording mechanism as part of the records of the company at least before the time of completion of audit of that particular year.
- to ensure that no person other than the concerned director are attending or have access to the proceedings of the meeting through video conferencing mode or other audio visual means; and
- to ensure that participants attending the meeting through audio visual means are able to hear and see the other participants clearly during the course of the meeting; Provided that the persons, who are differently abled, may make request to the Board to allow a person to accompany him.
- Roll Call at the Commencement of the Meeting, Invitees and Quorum:
At the commencement of the meeting, a roll call shall be taken by the Chairperson when every director participating through video conferencing or other audio visual means shall state, for the record, the following namely:-
- name;
- the location from where he is participating;
- that he has received the agenda and all the relevant material for the meeting; and
- that no one other than the concerned director is attending or having access to the proceedings of the meeting at the location mentioned in clause (b);
Information as to any Invitees for the Board meeting:
After the roll call, the Chairperson or the Company Secretary shall inform the Board about the names of persons other than the directors who are present for the said meeting at the request or with the permission of the Chairperson.
From the commencement of the meeting and until the conclusion of such meeting, no person other than the Chairperson, Directors, Company Secretary, if any, and any other person whose presence is required by the Board shall be allowed access to the place where any director is attending the meeting either physically or through video conferencing without the permission of the Board.
Quorum:
The quorum for a meeting of the Board of Directors of a company shall be1/3rd of its total strength or 2 directors, whichever is higher, and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum. The Articles of Association of the Company to be verified for any requirement, for having a higher quorum
Participation through video Conferencing shall be counted for the purpose of Quorum is the quorum unless he is to be excluded for any items of business under the provisions of the Act, as detailed above i.e., matters not to be dealt through Video Conference.
The Chairperson shall ensure that the required quorum is present throughout the meeting.
- Venue of the Meeting and placing of the Statutory Registers:
In respect of every meeting conducted through video conferencing or other audio visual means, the scheduled venue of the meeting as set forth in the notice convening the meeting, shall be deemed to be the place of the said meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.
The statutory registers which are required to be placed in the Board meeting as per the provisions of the Act shall be placed at the scheduled venue of the meeting and where such registers are required to be signed by the directors, the same shall be deemed to have been signed by the directors participating through electronic mode, if they have given their consent to this effect and it is so recorded in the minutes of the meeting.
- Proceedings at the meetings, manner of transacting an item at the meeting, Recording of Minutes: Director to Identify himself:
Every Director shall identify himself for the record before speaking on any item of business on the agenda.
If a statement of a director in the meeting through video conferencing or other audio visual means is interrupted or garbled, the Chairperson or Company Secretary shall request for a repeat or reiteration by the Director.
Voting:
If a motion is objected to and there is a need to put it to vote, the Chairperson shall call the roll and note the vote of each director who shall identify himself while casting his vote.
Summarisation of decisions taken:
At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority.
Recording of Minutes:
The minutes shall disclose the particulars of the directors who attended the meeting physically and through video conferencing or other audio visual means.
The draft minutes of the meeting shall be circulated among all the directors within 15 days of the meeting either in writing or in electronic mode as may be decided by the Board.
Every director who attended the meeting, whether personally or through video conferencing or other audio visual means, shall confirm or give his comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the draft minutes, within seven days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed.
The minutes shall be entered in the minute Book and signed by the Chairperson.
The recordings of the proceedings of the meeting along with date and time, shall be kept in the safe custody of the Chairperson or any Director of the Company.
From the above, it can be clearly seen that the facility of conducting Board Meetings through Video conference enable ease of operations and enhances the ability of the Board of Directors to take decisions in the interest of the Organisation.
