Board Meetings Through Video Conferencing.

Matters which cannot be dealt through video conferencing

• Approval of Financial statements
• Approval of Board of Directors report

General Rules regarding quorum, venue and participation

• Every director has to attend at least one Board Meeting in a financial year by participating in person (physical attendance). As per the Companies Act 2013 read with Secretarial Standard SS1, a Director can attend all the meetings in a year through Video Conferencing and may not be present physically in any of the Board meetings. 

• Participation through video-conferencing will be counted for the purpose of quorum.

• Venue specified in notice shall be taken as the venue of the meeting and all requisite registers to be kept at the venue.

• Registers required to be signed by directors shall be deemed to have been signed by directors who are participating through electronic means once they give their consent and same is recorded in the minutes.

• No person other than directors, Company Secretary, Chairperson and persons whose presence is required pursuant to a legal provision shall be allowed access to the place where any director is attending the meeting either physically or through video conferencing.

Requirements regarding notice

• Notice to contain details regarding availability of facility of video conferencing.
  

Duties of Directors

• Director to intimate, in writing, to Chairperson/CS regarding his intention to participate through video conferencing, at least 3 days in advance (unless waived by Chairperson), else he will be taken as participating in person.

• At the beginning of the meeting, all directors participating through video conferencing to state on record – their name, location, confirmation regarding clarity in hearing/seeing other participants, confirmation regarding receipt of agenda of meeting and confirmation that no one other than the concerned director is attending or having access to the proceedings of the meeting at their location.

• To identify themselves before speaking on any agenda.

• To identify themselves before casting their vote on any motion which is objected to.

• To confirm the draft minutes within 7 days of circulation.

Role of Chairperson/Company Secretary

Functions to be discharged by Chairman

• To make roll call at the beginning of the meeting
• To make a roll call and record the votes in case any motion is objected to.
• To make roll call at the end of the meeting and after every break.
• To summarise the decisions taken during the meeting on each item of agenda transacted along with the voting details, at the end of the meeting.

Functions to be discharged by Company Secretary

• To maintain record of requests received from directors regarding their intention to participate through video conferencing.

Functions to be discharged either by Chairperson or Company Secretary

• After roll call, to call out the name of persons who are attending meeting through permission of Chairperson and confirm regarding presence of quorum.
• To state the identity of speaker of agenda, if the speaker fails to do so.

Requirements regarding minutes and secretarial records

• Video recording of the part of the meeting where chairperson summarises the decisions taken at the meeting shall form part of the secretarial records and be preserved by the company.
• Minutes shall disclose the particulars of the directors who attended the meeting through video conferencing or other audio visual means.
• The draft minutes of the meeting shall be circulated among all the directors within 7 days of the meeting either in writing or in electronic mode as may be decided by the Board.
• Directors to confirm the minutes within 7 days, else their confirmation will be presumed.
• Thereafter, minutes to be entered in minutes book.

Credits: S.Dhanapal

independent director - companies act 2013

Requirements:

An independent director is someone who does not have any material or pecuniary relationship with the company/directors. Section 149(6) of the Companies Act 2013 [Act] prescribes the criteria for independent directors which are as follows: 

1. such individuals must possess integrity and relevant industrial expertise; 
2. such individuals must not have any material or pecuniary relationship with the company or its subsidiaries; 
3. they or their relatives should not have had any pecuniary relationship with the company or its subsidiaries, amounting to 2% or more of its gross turnover or total income or INR 5 million, whichever is less, during the two immediately preceding financial years or in the current financial year; 
4. such appointees or their relatives should not have any key managerial position in the company or its subsidiary companies during any of the three preceding financial years; 
5. such persons or their relatives should not have been an employee of the company or its subsidiary companies during any of the three preceding financial years; 
6. they or their relatives must not be a director of a nonprofit organization, which receives 25% or more of its receipts from the company or its subsidiary companies or its promoters/directors or from anyone who holds 2% of voting rights in such companies;
7. such individuals must not be a promoter of the company or its subsidiaries; 
8. they must not hold more than 2% voting rights in the company either by themselves or together with their relatives.

However 'independence' is not affected if a relative of the independent director holds a key position in a competitor entity. Both under the Companies Act and SEBI's Listing Agreement, it is possible for a director to be an independent director of a company, though his or her spouse/ relative is a director of a competitor company,

Remuneration:

The Act expressly disallows independent directors from obtaining stock options and remuneration other than sitting fees and reimbursement of travel expenses for attending the board and other meetings. Profit related commission may be paid to them, but subject to the approval of the shareholders. The reason for restricting the remuneration was to prevent personal financial nexus with the company and to safeguard their independence. However, the flip side is if the remuneration is not attractive then it would be difficult for companies to attract suitable and experienced persons for the position.