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Conducting Meeting Of The Board Of Directors During COVID

Riddhi Barfiwala, Assistant Manager - Compliance

As we are all aware due to the COVID-19 outbreak in different countries and as a safety measure, India has moved to a mandatory lockdown in most states. The Ministry of Corporate Affairs (MCA) has taken certain steps to liberalize the compliance requirements of the companies. Also in view of the traveling restrictions imposed due to COVID 19 the Ministry of Corporate Affairs (MCA) has allowed conducting the Board Meetings through Video Conferencing (VC) even on certain restricted items.

The steps to conduct Board meetings through VC.

The first step is to circulate the notice of the Board Meeting to all the directors of the company at least 7 days before the meeting or at a shorter notice. The notice should specify the details of the video conferencing as well as the steps on how to participate in the meeting. The Chairperson should take a role call on all the directors present at the meeting.
Every director participating in the meeting must state at the beginning of the meeting his name, the location from where he is participating, he must ensure that he has received the agenda and all the relevant material for the meeting and no other person other than the concerned director is attending or shall access the proceedings of the meetings.
The Chairperson of the Company Secretary (CS) shall ensure that the required quorum is present at the meeting. The directors must mention their names and then vote on any matter. If any statement of the director in the meeting through VC is interrupted or garbled, the Chairperson or the Secretary or the CS shall request for a repeat or reiteration by the director. The draft of the minutes of the meeting shall be circulated to all the directors within 15 days of the meeting.
Every director or member who attended the meeting shall confirm or give his comments in writing about the accuracy of the proceedings of that particular meeting in the draft minutes within 7 days or such time as needed as decided by the Board. After completion of the meeting, the minutes shall be entered in the Minutes book and shall be signed by the Chairperson.
Ministry of Corporate Affairs (MCA) has now allowed conducting the Board Meeting through VC on matters such as approval of the annual financial statement, approval of the Board’s Report, the approval of the prospectus and the role of the matters relating to amalgamation, mergers, demergers, and takeovers till June 30th, 2020. Earlier these matters could not be conducted or held through VC but in view of the recent restrictions and lockdown, MCA has relaxed and allowed to conduct the Board Meeting through VC even on unrestricted items.

Certain points to be kept in mind-

Proper availability of VC or AV facilities should be accounted for the effective participation of the directors.
The Chairperson and the CS shall ensure the integrity of the meeting and only close persons required at the meeting shall be allowed access to the meeting. The Chairperson shall ensure the requisite quorum is present throughout the meeting.
The minutes should disclose the details of all the directors who attended the meeting through VC or Tele Conference facility the recording of the meeting shall be kept in the safe custody of the company for a minimum period of 8 financial years.