SECRETARIAL
STANDARD ON MEETING OF THE BOARD OF DIRECTORS AND COMMITTEES – SS 1
By
CS
K VINOTH and CS D HEM SENTHIL RAJ
In
today’s business scenario, where the country is heading towards the
Globalisation, it may not be possible by the Board of Directors of the Company
to be involved in the decision making of each and every activities of the
Company. In addition to that it may not be practically possible for a Company
to request the Independent Directors or Directors other than the whole-time
Directors of the Company to be involved in the day to day decision making of
the Company. In order to overcome the difficulties in making timely decision,
the Companies Act, 2013 provides the powers to Board of Directors of the Company
to delegate their Powers to:
any
committee of directors, the managing director, the manager or any other
principal officer of the Company or in case of a branch office of the Company,
the principal officer of the branch office.
The power to delegate is specified in
Section 179 (3) (d)
--------- to borrow monies.
Section 179(3)
(e)--------- to invest the funds of the Company.
Section
179(3)(f)---------to grant loans or give guarantee or provide security in
Respect of
loans.
However,
the Act does not restricts the Board of Directors of the Company to form separate/consolidated Committees for the
transacting the business other than those specifically mentioned in Section 179
of the Companies Act, 2013 and The Company (Meetings of Board and its Powers)
Rules, 2014.
In
this Scenario, we have given the list of things to be taken note while
conducting the Board/Committee meetings other than the mandatory committees
required to be formed under the Companies Act, 2013 in line with the
Secretarial Standards – 1, which is coming in to practice with effect from 1st
July, 2015.
Applicability:
Standard shall be applicable to
the Meetings of Board of Directors and Meetings of Committee (s) of the Board
of all the Companies except OPC.
Key Points To Note:
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Director to call
for Board/Committee Meeting
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Now
the Director of the Company is vested with the power to request the Board to
call for a meeting and the Company Secretary/any person authorised by the
Board shall convene a meeting of the Board on requisition of a Director.
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Now
the Notice of Board Meeting including Committee Meeting shall have Serial
Number, which shall be recorded in the minutes in the same passion.
Example: 22nd
Board Meeting of the Company, 21st Allotment Committee Meeting of
the Company etc.
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Serial
Number
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Issuing Notice
of
Board/Committee
Meeting
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Notice
of Board Meeting and Committee Meeting shall be issued by Company Secretary; in
the absence of a Company Secretary, notice shall be issued by Director or any
other person authorised by the Board.
Note:
SS
– 1 provides that notice shall be issued by the Director, which shall include
Independent Director, Nominee Director, Alternate Director etc...,
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Notice, Agenda and notes on
agenda of Board/Committee meeting shall be given at least seven days before the date of Meeting, unless articles
of the Company provides for a longer period. In case of dispatch of notice
through speed post/registered post/courier, an additional two days shall be
added for the service of Notice.
Exemption:
Notes on items of business
which are in the nature of Unpublished Price Sensitive Information may be
given at a shorter period of time than stated above, with the consent of a
majority of the Directors, which shall include at least one Independent
Director, if any.
General consent for giving
Notes on items of Agenda which are in the nature of Unpublished Price
Sensitive Information at a shorter Notice may be taken in the first Meeting
of the Board held in each financial year and also whenever there is any
change in Directors.
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Notice, Agenda and notes on
agenda of Board/Committee meeting
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Other Items
in Agenda of Board/Committee
Meeting
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Any item not included in the Agenda may be taken
up for consideration with the permission of the Chairman and with the consent
of a majority of the Directors present in the Meeting, which shall include at
least one Independent Director, if any.
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To transact urgent business, the Notice, Agenda
and Notes on Agenda may be given at shorter period of time than seven days,
if at least one Independent Director, if any, shall be present at such
Meeting. If no Independent Director is present, decisions taken at such a
Meeting shall be circulated to all the Directors and shall be final only on
ratification thereof by at least one Independent Director, if any. In case
the company does not have an Independent Director, the decisions shall be
final only on ratification thereof by a majority of the Directors of the
company, unless such decisions were approved at the Meeting itself by a
majority of Directors of the company.
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Shorter
Notice
for urgent Business
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Quorum and
Entries in
Attendance Register
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Quorum shall be present not only at the time of
commencement of the Meeting but also while transacting business.
Entries in the attendance register shall be
authenticated by the Company Secretary or where there is no Company
Secretary, by the Chairman by appending his signature to each page.
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Minutes of the Committee
meeting shall be taken note by the board of Directors.
The time of
commencement and conclusion of meeting to be specified.
Draft minutes shall
be finalised within 15 days from the date of committee meeting.
Minutes shall be entered in the Minutes Book
within thirty days from the date of conclusion of the Meeting.
A copy of signed
minutes certified by CS or Director authorised by the Board as the case may
shall be circulated to all the members within 15 days after they are signed.
Noting of committee meeting minutes shall not be
included in circular resolution.
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Other Key Points
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Minutes
Shall Mandatorily Include the Following as per the SS –1:
Record of election, if any, of the Chairman of the
Meeting.
Record of
presence of Quorum.
The names of Directors who sought and were granted
leave of absence.
The mode of attendance of every Director whether
physically or through Electronic Mode.
In case of a Director participating through
Electronic Mode, his particulars, the location from where and the Agenda items
in which he participated.
The name of Company Secretary who is in attendance
and Invitees, if any, for specific items and mode of their attendance if
through Electronic Mode.
Noting of the Minutes of the preceding Meeting.
Noting the Minutes of the Meetings of the
Committees.
The text of
the Resolution(s) passed by circulation since the last Meeting, including
dissent or abstention, if any.
The fact that
an Interested Director was not present during the discussion and did not vote.
The views of
the Directors particularly the Independent Director, if specifically insisted
upon by such Directors, provided these, in the opinion of the Chairman, are not
defamatory of any person, not irrelevant or immaterial to the proceedings or
not detrimental to the interests of the company.
If any
Director has participated only for a part of the Meeting, the Agenda items in
which he did not participate.
The fact of the dissent and the name of the Director
who dissented from the Resolution or abstained from voting thereon.
Ratification by Independent Director or majority of
Directors, as the case may be, in case of Meetings held at a shorter Notice and
the transacting of any item other than those included in the Agenda.
The time of
commencement and conclusion of the Meeting.
By
CS D HEM SENTHIL RAJ
CS K VINOTH
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