Board Meetings?

[Moriarty]

Hi All,

I'd be grateful for any opinion on board meetings where the MOI makes no provision for a required notice period of board meetings to the directors, board meetings are usually conducted electronically and resolutions passed by way of a round robin. A board meeting is convened and ordinary resolutions are passed by a simple majority of the board including the chairman but one director does not acknowledge receipt of the email convening the board meeting. S73 (5) (a) (i - iii) allows the meeting to proceed if all of the directors acknowledge receipt of the notice, are present at the meeting or waive notice of the meeting. In the absence of any communication from this director, are the resolutions null and void?

If so, can the MOI be changed to avoid this situation recurring in the future? The company in question has a couple of non-executive directors abroad.

Thanks,

Moriarty

Edit: An email was sent to all directors convening the meeting and asking them to vote on the resolutions.

[Andromeda]

Sec 73 (5) is, as far as my understanding goes, is applicable to a physical meeting and then (i) to (iii) must still be present.

I too use round robin, but to be pedantic about it, I don't believe the Act had that in mind because it refers to an electronic meeting with facilities that enable concurrent communication, which round robin does not do. I have also not seen a case where this is in dispute.

On the other hand, I have on occasion had to resort to email delivery reports to show that a director did receive notice of a meeting, but that's another matter.

In your specific situation, it is my opinion that the meetings were not properly held and then as a consequence the resolutions are invalid, unless the round robin thing is ok (but I have never been able to pin tat aspect down). However I truly believe that it is only a concern if there is a dispute. There are many, many cases where the courts have accepted processes that are not exactly right if it is shown that all directors had knowledge of the issues, had opportunity to discuss and challenge, and had opportunity to vote. That is really the issue.

To address these issues you would have to amend the MOI, and that basically means completing a custom MOI that is adopted by special resolution. To customise the MOI you should really be guided by an attorney well versed in corporate law and related matters, because it is challenging to say the least.

[Moriarty]

Thank you, very useful.

Thankfully the recalcitrant director has, in the interim, finally responded and voted in favour of the resolutions.