For a board meeting to be productive and value adding, the Directors should discuss strategic matters, as well as matters relating to the business of the company. These discussions include, but are not limited to, approvals, procedures to be adopted and future prospects relating to the business.
Convening and conducting a Board meeting, is a very responsible task. It involves considerable coordination, time management and preparation of relevant material for the Board. Some of the important aspects include –
Finalisation of date – Ordinarily, any worthwhile company should have an annual calendar of meetings. Absent this, the dates should be fixed sufficiently in advance to enable the Directors to block the dates. As a good corporate governance practice, many organisations prepare an annual calendar to manage the Board and committee meetings in a financial year. However, it has been noticed that at times, the date of the meeting is changed due to a variety of reasons, such as non-availability of a Director. This should ideally be avoided.
Preparation of notice and agenda – The notice and agenda for the meeting should be circulated at least seven days in advance of the scheduled meeting. For preparing the list of agenda items, the Company Secretary usually has a discussion with the Chairman/CEO, as well as other Heads of Departments (HODs). All relevant items, along with agenda notes, complete in all aspects, should ideally be sent out to the Board members, along with the notice and agenda, in order to facilitate meaningful discussions. Suggestions should be invited from Independent Directors regarding agenda items which they might like the Board to consider. While preparing the agenda, care should be taken to ensure that all present and immediate future needs of the business are considered. There must be active participation from all HODs while agenda is prepared.
Pre-Board meetings – Some companies have a practice of convening ‘Pre-Board Meeting’ with some or all Directors, present individually, ahead of the scheduled Board meeting. The reported reason behind this is to make him/her aware of the agenda items. However, this is an unhealthy practice as the Board should meet and deliberate on agenda items collectively, and also such practices could lead to information asymmetry as well as leakage of unpublished price sensitive information (UPSI).
While convening the Board Meeting, some of the common issues, which can be avoided with proper planning, include –
- Technical difficulties such as poor internet connection, software issues, etc.- Whenever necessary, the IT department can conduct mock runs prior to the meeting, to ensure that there are no technical glitches.
- Lack of preparation – All HODs should be well prepared to respond to queries from Directors relating to their relevant agenda items.
- Lack of synchronisation and planning – Every participant/attendee/invitee should be mindful about his/her role during the meeting. He/she should stick to the time allotted for his/her agenda item, and should respect the discipline of the schedule.
- Absence of time management – Not starting or ending the meeting at the scheduled time reflects lack of focus. The agenda items could have an indicative time mentioned so as to help the participants stick to the schedule. The Chair of the Board is expected to play a vital role in this regard.
Preparing for the Board Meeting, and conducting it in a productive fashion, is a very important task. With the Board being at the apex of the company, it stands to reason that its time should be productively spent.