A RESOLUTION ALL BOARDS SHOULD CONSIDER ADOPTING

The Companies Act provides that any person authorised by its board may call a board meeting at any time and that such person must call a board meeting if required to do so by 25% of the directors where there 12 directors or more, or if required by 2 directors where there are less than 12 directors.

Therefore, if the board has not passed a resolution authorising a person to call a board meeting it is theoretically impossible for any two directors (or 25% where there are 12 or more directors) to summon their co-directors to a meeting.

This is the case even if the company’s MOI states that one or more directors may convene a board meeting. Article 73 of the standard Table B articles of association under the 1973 Act for example provided that a director may, and the secretary on the requisition of a director must, at any time convene a meeting of the directors.

It is noteworthy that the percentage and number thresholds may be changed in the MOI.

Where a company has appointed a chairperson, the board should authorise the chairperson to call board meetings.

Companies with 3 directors, or with minority director representation on the board, should consider amending their memoranda of incorporation to allow any 1 director to call a board meeting.

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