For any business company, the internal structure is important. If it will function correctly, then things will go well in the organization as well. One such internal structure is the board of directors, which oversees the course and progress of the company, makes important decisions on scaling and improvement, handles hiring, and oversees compliance with all company rules and policies. The board of directors is the most important part of the company and in this article, we will talk about board meeting definition in more detail.
What is a board meeting?
The most correct definition of the board meeting is an official meeting of the directors of the company and invited guests which takes place in cycles, their purpose is to check the performance, analyze policy issues and solve the main problems of the company that have arisen during the period.
As a rule, it is up to the board members to decide how often the meetings will be held and what rules will appear in them. Board members are appointed both from within and outside the organization, choosing experts in a particular field to have an “outsider’s perspective” and to make healthy and balanced decisions. Sometimes, even business owners can participate on the board. The meeting is always held in the presence of a chairman and secretary.
The main task of the board is to make formal decisions about the company’s future plans and strategies, which will then be voiced to the rest of the organization. At these meetings, the directors discuss the financial results, the effectiveness of the results of the different areas of the company and decide on the dismissal or hiring of new board members.
Main board of directors meeting rules
Below we describe the board of directors meeting rules that all companies adhere to:
- The board of directors decides matters which have been provided for in the articles of association and rules of the company, as well as supervises the proper execution of the duties of both directors and other corporate officers. Decisions that have been finally certified by the board of directors shall be detailed in the board rules
- The board of directors is considered to be so when all members of the board are present
- The chairman has the power to convene boards of directors if this has been described in the Bylaws. If the chairman is unable to do so, another director shall do so, the manner of this duty must be previously agreed upon by the entire board
- The presiding director must give at least three days’ notice of the meeting, to each of the members separately, attaching the exact date, time, and place of the meeting along with an agenda. In cases of urgency, the notice period may be shortened
- The Board must meet no more often than every three months
- Meetings should be held at the company’s headquarters, but if circumstances require, they may be held elsewhere and the location must be indicated in the notification
- Decisions are made in a diplomatic manner, by ballot. The resolution voted for by a majority of the directors present at the meeting is the official resolution
- If a member has any special interest or benefit based on a decision on an issue, he or she has no right to vote
- When the chairman puts forward an issue for approval by the board and all directors express their agreement, the date of that decision is the date on which all members have filled out their online or paper consent form
- All matters previously communicated to board members in writing or electronically do not require a verbal pronouncement
- Board minutes must always respect the validity that occurs during the meeting