Directors’ meetings: guidance and template board meeting minutes

Posted on December 18, 2020
Posted by Harry Birmingham

Template board meeting minutesYour company’s directors must ensure that all board meetings are called validly and conducted in accordance with the terms of your articles of association. The decisions reached should then be recorded in board minutes. We can help you to ensure you follow the correct process when making decisions at a board meting, and you can use our customisable template board meeting minutes to record any decisions.

If you fail to follow the correct decision-making procedures and a decision is contentious, it could be liable to subsequent legal challenge by an aggrieved director or shareholder. In addition, failure to properly record your board decisions can be a red flag for any potential investor or buyer. It is therefore vital to put in place processes that ensure you get things right.

Board decision-making: a refresher

How do my company’s directors make decisions?

This will be set out in your articles of association. 

If your company has the model articles, decisions can be taken in the following ways:

  • At a board meeting

    Passing a board resolution at a board meeting is the usual way for directors’ decisions to be made, and will always be necessary where a matter needs to be discussed between two or more directors. 

  • In writing or informally

    If not made at a board meeting, directors’ decisions must be reached unanimously. It is possible for this to be done informally although you will need to check that there is no restriction on the directors’ ability to do this in the company’s articles of association.

    If your company has the model articles, your directors are allowed to make decisions in this way. In practice, especially where the matter is not straightforward, it is recommended that any unanimous decisions made outside of meetings are recorded in a written board resolution signed by all directors. This is the route suggested in the model articles. 

  • By a sole director

    If your company has only one director, the model articles do not require them to follow any particular procedure to make decisions. However, it is good practice to record a sole director’s decisions.

For a step-by-step checklist summarising how a board resolution should be passed by a company with model articles, see Checklist for passing a board resolution

For more detailed guidance on making directors decisions, and company decision-making generally, see Board and shareholder decisions. This post is focused specifically on directors’ decision-making at board meetings, in particular for companies with model articles.

How do I hold a board meeting and pass a board resolution?

If your company has the model articles, the procedure for convening a board meeting and passing a resolution is as follows:

  • notice of the meeting must be given to all of the directors (unless any director has waived their entitlement to receive notice), which any director can do;

  • the meeting must be conducted and managed in accordance with the rules set out in the model articles; and

  • you must prepare and keep written board minutes of the meeting for at least ten years.

Under the model articles, your company will be free to conduct board meetings in any manner which allows the directors to communicate with one another. This flexibility includes board meetings held by telephone and by video-conferencing apps like Zoom, Skype or Teams.

The model articles give your directors scope to make other rules about how they take decisions, so you can consider doing this if it suits your company. However, any rules introduced cannot go against what the model articles say about notice, required attendees, voting and appointment of the chair.

Our Checklist for passing a board resolution contains step by step guidance on holding a board meeting for companies with model articles.

Can I hold a board meeting via telephone or video-conferencing apps like Zoom or Skype?

In most cases, yes. If your company has the model articles and no restrictions in any shareholders’ agreement, you can conduct board meetings in any manner which allows the directors to communicate with one another. This flexibility includes board meetings held by telephone and by video-conferencing apps like Zoom and Skype.

If your company has modified articles of association, or a shareholders’ agreement, you should check these for any restrictions or requirements on how board meetings are held.

Giving notice of a board meeting

Do all my company’s directors need to be given notice of a board meeting?

Yes. Your company’s articles of association will usually set out the requirements for giving notice to convene a board meeting. If your company has bespoke articles, they should say what you need to do.

If your company has the model articles and your directors have not made any additional rules about the decision-making process, notice of a board meeting must usually be given to all directors.

Who can give notice of a board meeting?

Any director can give notice of a board meeting.

How should notice of a board meeting be given?

Notice is often most easily circulated to directors via email, but it does not necessarily need to be given in writing, so could be given verbally if preferred. However, the following must always be specified:

  • the date and time of the meeting; and

  • the location of the meeting and/or the method by which the directors should communicate at the meeting (eg a dial-in number or video-conference details if not in person).

Whilst not required, it can be helpful to include an agenda for the meeting as well. This can be particularly helpful to help regulate telephone or video-conference meetings. It is also recommended to circulate any documents to be discussed at the meeting in advance, to facilitate discussion.

If your company has a shareholders’ agreement, this should be checked for any additional notice requirements.

How much notice must be given before a board meeting?

There is no set period of time in which notice must be given, but it must be given in reasonable time before the meeting takes place. What is reasonable will depend on the circumstances of the meeting.

The key purpose of giving notice is to allow directors the time to make arrangements to attend and to prepare for the meeting. You should therefore take into account the subject matter of the meeting and the location of the directors when deciding how much notice to give. If all directors are close by and ready to attend, a very short period of notice of a few minutes can be acceptable.

If your company is subject to a shareholders’ agreement, this should be checked for any additional notice requirements.

What happens if proper notice of a board meeting is not given?

If proper notice is not given to all directors, the business carried out at the meeting will be of no effect, so it is very important to give enough notice.

If a director has not had proper notice of a board meeting, can it be corrected?

Yes, if the director affected acts promptly.

A director can waive their right to proper notice of a board meeting. They do this by notifying the other directors about it up to seven days after the meeting is held. If any affected directors do this, the meeting will be valid and any business done during it will stand.

Running a board meeting

Where should I hold a board meeting?

If your company has the model articles and there are no additional rules in any shareholders’ agreement, there is no particular requirement about where the meeting should be held. The directors do not even have to all be in the same place, as long as they can communicate with one another. The meeting could therefore take place via telephone or video-conference.

Who should be the chair of a board meeting?

Any requirements about appointing a chair for board meetings will be set out in your company’s articles of association. If your company has bespoke articles, you should review these to identify the requirements.

If your company has the model articles, your company’s directors can appoint one of themselves to be the chair of their meetings, by majority vote.

If your company is subject to a shareholders’ agreement, this should be checked for any additional requirements regarding the chair. It may be that a particular shareholder has the power to appoint or remove the chair.

What does the chair of a board meeting do?

It will be the chair’s responsibility to run board meetings, which will include checking that a quorum is present and that all items on the agenda for the meeting are dealt with. Importantly, if your company has the model articles, the chair will have a casting vote in the event of a deadlock on a particular matter.

If the board meeting is being held by telephone or video-conferencing, it is recommended to have the chair serve as the host of the meeting. Many video-conferencing apps give the host the ability to mute certain speakers, share their screen, and share documents. The chair should be responsible for managing these aspects of the meeting, to help regulate discussion.

Who runs a board meeting if the chair is not there?

If you have the model articles and the chair is not present at the meeting within ten minutes of when it starts, the directors must appoint one of those present as the chair for that particular meeting.

If your company is subject to a shareholders’ agreement, this should be checked for any additional requirements regarding the chair.

What is quorum for a board meeting?

In order for decisions to be made at a board meeting, there must be a minimum number of directors present, known as the quorum.

If you have the model articles, the quorum cannot be less than two directors and will be two if not otherwise fixed by the directors. If the total number of directors present is less than the quorum required, your directors cannot take any decisions other than to propose to call another meeting.

If your company has only one director, that director is able to make decisions without having to worry about the quorum requirements.

What happens if a board meeting is not quorate?

If you have the model articles and the total number of directors present is less than the quorum required, your directors cannot take any decisions other than to propose to call another meeting.

What happens if a director is disconnected from a board meeting held by telephone or video-conferencing?

If you are conducting a board meeting on a conference call, or by using apps such as Zoom or Skype, the Chair should pay close attention to ensure no directors are disconnected during the call. If a director is disconnected, you should stop the meeting until they are able to reconnect. Whilst a director is disconnected, they will no longer be present at the meeting, and this may affect whether a quorum is present.

If a director is unable to reconnect, and you still have a quorum present, you can continue the meeting in their absence (with the disconnected director’s consent), but this should be noted in the minutes.

How do directors vote at a board meeting?

If you have the model articles, in order for a board resolution to be passed at a meeting, the majority of those directors in attendance must vote in its favour. If votes are equal, the chair of the meeting has a casting vote although think very carefully whether you want them to have this right.

There is no set requirement about how votes should be made; a simple show of hands is often most appropriate where the directors are all in one place.

If you are conducting a board meeting by conference call or a video-conferencing app like Zoom or Skype, when it comes to voting it is recommended that the Chair asks each director separately to verbally confirm whether they agree or not, rather than using a show of hands (where a frozen screen or lag could cause issues). If there is any doubt regarding voting, the Chair should ask directors to confirm their votes in writing, via any text chat facility, messaging, or email.

What happens if a director has a personal or vested interest in a board resolution?

If you have the model articles, a director who is interested in a transaction or arrangement with your company which is to be considered at a board meeting cannot count as part of the quorum and are not entitled to vote in relation to the matter in question unless authorised by an ordinary resolution of your shareholders. There are limited exceptions.

Example of transactions or arrangements on which a director would not be able to vote are:

  • your board considering approval of a service agreement between the director and your company;

  • if the director is a shareholder of your company and your board is considering payment of a dividend to shareholders; or

  • your board is considering a proposed contract between your company and someone connected with the director such as their spouse.

See Directors’ conflicts of interest for information about what a director must do and what action should be taken if they have such an interest or otherwise have a conflict of interest with your company.

Keeping records of board decisions: Template board meeting minutes

Do I have to keep minutes of all board meetings?

Yes.

Your company is required to prepare and record written board minutesof matters that take place at board meetings, keeping the records for at least ten years after the relevant meeting. There is no set format that the minutes need to take, but they should clearly record all formal business and resolutions that take place at the meeting. 

The minutes can be prepared in advance of the meeting and then approved at the meeting, as long as they accurately reflect the discussions and decisions that in fact took place. If the pre-prepared draft does not reflect what in fact took place, it should be amended before it is approved.

There is no requirement to file any record of directors’ decisions at Companies’ House.

Next steps

Whenever your company holds a board meeting, you should keep minutes as a record. You can use our template board meeting minutes as a blank canvas, or we have a range of tailored template board meeting minutes to cover a range of common situations your company is likely to encounter, including: