How to conduct Board Meetings and General Meetings after 1st July, 2015 ??

board_banner

INTRODUCTION

The ICSI has issued new secretarial standards which have been approved by the Central Government and shall apply to Board Meetings and General Meetings, in respect of which Notices are issued on or after 1st July, 2015. The Institute of Company Secretaries of India is the first institution to issue secretarial standards anywhere in the world and around 8 lakh companies in India will have to comply with these Secretarial Standards. The adoption of the Secretarial Standards by the corporate sector will have a substantial impact on the quality of secretarial practices being followed by the companies, making them comparable with the best practices in the world. It will also ensure observance of uniform practices across Board, while strengthening the Board processes, protecting individual directors, preventing oppression & mismanagement, building up investor confidence and better monitoring of compliances, thereby achieving the common goal of better corporate governance.

SECRETARIAL STANDARD ON MEETINGS OF THE BOARD OF DIRECTORS (SS-1)

INTRODUCTION

This Standard prescribes a set of principles for convening and conducting Meetings of the Board of Directors and matters related thereto.

SCOPE

This Standard is applicable to the Meetings of Board of Directors of all companies incorporated under the Act except One Person Company (OPC) in which there is only one Director on its Board. The principles enunciated in this Standard for Meetings of the Board of Directors are also applicable to Meetings of Committee (s) of the Board, unless otherwise stated herein or stipulated by any other applicable Guidelines, Rules or Regulations. This Standard is in conformity with the provisions of the Act. However, if, due to subsequent changes in the Act, a particular Standard or any part thereof becomes inconsistent with the Act, the provisions of the Act shall prevail.

SS-1 seeks to ensure that a healthy and transparent procedure is followed for convening a board meeting by an authorised person, sufficient advance notice is given to the directors, the agenda contains adequate details of the proposals, board members are given proper opportunity to take an objective view on the matters to be discussed, necessary discussion follows at the meeting and recording of decisions is made objectively by drawing up proper minutes of the business transacted at the meetings.

With regard to board meetings, the draft minutes should be circulated to all the members of the board for their comments within 15 days from the date of conclusion of the meeting. The above given standards are to be effective from 1st July 2015.

Secretarial Standard on Board Meetings (SS-1)

The Secretarial Standard on Board meetings, adherence to which is mandatory now contains detailed practices and procedures mainly with regard to the following:

  • who may convene the meeting
  • time, place and mode of holding such meeting
  • meeting notice & agenda – frequency of meetings
  • meetings of Board committees and independent directors, quorum, attendance at meetings
  • directors’ participation in a meeting through electronic mode
  • chairman of board or committee meetings
  • procedure for passing board resolutions at board meetings, or, by circulation
  • minutes of board meetings and minute books .

 

SECRETARIAL STANDARD ON GENERAL MEETINGS(SS-2)

INTRODUCTION

This Standard seeks to prescribe a set of principles for the convening and conducting of General Meetings and matters related thereto. This Standard also deals with conduct of e-voting and postal ballot.

SCOPE

This Standard is applicable to all types of General Meetings of all companies incorporated under the Act except One Person Company (OPC) and class or classes of companies which are exempted by the Central Government through notification. The principles enunciated in this Standard for General Meetings of Members are applicable mutatis- mutandis to Meetings of debenture-holders and creditors. A Meeting of the Members or class of Members or debenture-holders or creditors of a company under the directions of the Court or the Company Law Board (CLB) or the National Company Law Tribunal (NCLT) or any other prescribed authority shall be governed by this Standard without prejudice to any rules, regulations and directions prescribed for and orders of, such courts, judicial forums and other authorities with respect to the conduct of such Meetings.

During the general meeting, the company’s chairman would be required to explain the objective and implications of a particular resolution before being put to vote. There should also be quorum throughout the meeting and not just at the beginning.

Secretarial Standard SS-2 on general meetings is meant to ensure that members of a company receive the notice of a general meeting in time, it contains particulars required by a member to decide whether or not to support a resolution, he has proper opportunity to attend the meeting, vote with or without attending the meeting physically either in favour of or against the resolution, such votes are counted properly for declaration of the voting results, the meeting is conducted in a fair manner, proceedings at the meeting are recorded objectively in the minutes of the meeting and the minutes form a part of the permanent record of the company.

Adherence to the Secretarial Standard on General Meetings which is also mandatory now will ensure that within the overall legal framework laid down in the new 2013 Act, a uniform practice is followed by companies mainly with regard to the following:

  • the meeting is duly authorized and convened,
  • notice is given in time and sent in an authorized manner,
  • agenda contains the requisite particulars, – frequency of meetings,
  • quorum, – presence of directors and auditors, – chairman of the meeting and his responsibilities,
  • proxies,
  • voting by a show of hands, postal ballot, poll and electronic voting,
  • scrutineer’s role and responsibilities,
  • rescinding of, or, modification to resolutions,
  • distribution of gifts,
  • adjournment of meetings, and
  • minutes

QUICK CONTACT