COVID-19 and Virtual Board Meetings… The Coronavirus pandemic is affecting the way in which ordinary business is conducted, and board meetings are no exception; board meetings give the directors the opportunity to exchange views and make collective decisions on behalf of the company. The UK Government’s lockdown has prohibited, amongst other things, public gatherings of more than two people. For most companies, these measures make it impossible to hold physical board meetings in the usual way.
The Companies Act 2006 does not restrict virtual board meetings provided that those directors in attendance may fully participate in the meeting (i.e. speak and vote). This includes holding meetings by telephone. Therefore, subject to the company’s articles of association, a company can hold virtual meetings and most boards will be familiar with the process, but it is especially important in the current environment (where directors may be using new technology for the first time or stranded in different time zones) that the process set out in the articles for virtual meetings is followed. For example, if your company has adopted model articles of association, it is irrelevant where any director is or how they communicate with each other, provided that the meeting has been called in accordance with the articles and they can communicate any information or opinions they have on any particular item of business (article 10).
Key points to consider when it comes to virtual board meetings
- How will the meeting be conducted? Will this be via audio and/or video conference? What technology is needed to enable voting at the meeting? The notice convening the meeting should contain details of the technology that will be used for the meeting as well as logistical details, including the date and time of the conference and how directors can access the meeting and any important documents about which the meeting relates.
- Attendance/quorum: The notice convening the meeting should explain to the directors how they will be able to participate in the meeting, as opposed to just listening in. For most companies, the minimum number of eligible directors that must be present at any meeting to make the proceedings of that meeting valid is two (“quorum”). Although not advised, under the current restrictions on public gatherings, people are permitted to travel for the purposes of work (where it cannot be done from home) and to gather in numbers of no more than two. Where quorum is greater than two, or where several directors wish to participate in the meeting, a virtual meeting will be necessary.
- Who will host the meeting? It should be established who will be responsible for setting up and hosting the audio/video conference and ensuring that any COVID-19 related measures in place at the time are observed.
- Minutes: These will need to be considered carefully in advance and adapted to reflect the electronic means used for the particular meeting. The chairperson will also need to explain any particular procedures to the other directors at the start of the meeting and the explanation will probably need to be more detailed than would be necessary for a physical meeting.
This is not intended to be an exhaustive list of all the issues for consideration when convening and conducting virtual board meetings. Therefore, we strongly recommend that you seek legal advice if you are unsure on whether the company’s articles of association allow for virtual board meetings, or how they should be conducted.
SO Legal Solicitors Eastbourne – 01323 407555
SO Legal Solicitors Brighton & Hove – 01273 069920
SO Legal Solicitors Hastings – 01424 709050
SO Legal Solicitors Uckfield – 01825 729840
SO Legal Solicitors Notting Hill – 0203 9677700