COVID-19: Practical considerations for conducting board meetings

The next few months will continue to pose many challenges for businesses. With this in mind, regular board meetings are vital to ensuring that businesses remain resilient to the immediate and long-term challenges arising from coronavirus COVID-19 ("COVID-19"). Over the course of the past few weeks our corporate services team have been providing additional support to our clients, to assist them in facilitating continued discussions between board members and to ensure that any decisions of the board are made in accordance with company law requirements.

Below we share some of our practical considerations for conducting board meetings during the COVID-19 pandemic.

At the outset, it should be noted that Irish law grants boards with a significant amount of flexibility and autonomy in relation to the governance of their meetings. In fact, section 160(1) of the Companies Act 2014 (the "Act") provides that boards may regulate their meetings "as they think fit." This appears to be in recognition of the business reality that often times boards will be required to meet at short notice to attend to urgent business matters quickly and decisively.

Convening Board meetings by video, telephone or other electronic means

In light of social distancing measures, directors may no longer be capable of meeting together in a physical location to transact business, however, in accordance with the Act and the relevant governing documents, boards may be permitted to meet by video, telephone or other electronic means.

If a meeting is held in this manner, each of the directors present should be able to effectively engage in the meeting, with each director in a position to speak to each of the other directors, and be heard clearly by those present. It is essential that company secretaries engage in active dialogue with directors to sufficiently plan in advance of any virtual meetings to ensure that meetings are conducted as smoothly and efficiently as possible.

Where a meeting is held in this manner, the location of the meeting will be deemed to be:

• where the largest group of those participating in the meeting is assembled;

• if there is no such group, the location of the chairperson; or

• if neither of the above applies, in such location as the meeting itself applies.

Ensuring that a quorum is present

No business may be transacted at a Board meeting unless a quorum of directors is present.

Governing documents may specify a minimum number of directors that must be present for a directors' meeting to be valid. In most instances the quorum requirements are set by default by section 160(6) of the Act which provides that "the quorum necessary for the transaction of the business of the directors may be fixed by the directors, and unless so fixed shall be two but, where the company has a sole director, the quorum shall be one."

During these challenging times, boards should ensure that sufficient measures are in place to ensure board meetings are quorate. Unfortunately, the reality of COVID-19 may give rise to circumstances where a director or a number of directors will not have the capacity to be present. If such a situation arises, the meeting may not be quorate and in these cases any business transacted may be deemed to be invalid. In this regard, directors should consider the possibility of appointing an alternate director to attend and participate in board meetings where they are unable to do so.

When appointing an alternate director the Companies Registration Office ("CRO") should be notified of the appointment by way of a Form B10. In addition, whenever the individual ceases to be an alternate director the resignation must be formally communicated to the CRO.

Prior approval from the Central Bank of Ireland (the "Central Bank") by way of completion of an individual questionnaire ("IQ") is also required before an alternate director can be appointed to a regulated entity, be this a permanent or short-term appointment.

Notice period

In the interests of good governance, directors should, unless extenuating circumstances arise, receive adequate notice of board meetings to ensure that they can attend and participate. A minimum notice period is not specified in the Act, however, section 160(4) provides that "all directors shall be entitled to reasonable notice of any meeting of the directors but, if the directors so resolve, it shall not be necessary to give notice of a meeting of directors to any director who, being resident in the State, is for the time being absent from the State."

This provision recognises the necessity for boards to have the ability to deal with urgent matters promptly and efficiently.

Location of meeting

The company secretary should consult with the governing documents of an entity to determine if there are any restrictions with regards to the location of board meetings. Consideration should also be given to if any jurisdictional specifications are also included therein.

Circulation of soft-copy board papers

The timeline for the circulation of board papers is usually set by the company secretary or at the preference of the directors. There are no prescribed specifications set out by law, however, it is advisable that board papers be circulated within a sufficient timeframe for review by the Board in order to enable each director to make a meaningful contribution to the discussions at the corresponding meeting and make informed decisions thereto.

With continued technological improvements, and an increased focus on environmental sustainability and efficiency, there has been an unprecedented shift in demand for board papers to be distributed via electronic means. These systems can facilitate the secure and efficient delivery of board materials, enabling directors to make informed decisions at board meetings. There are a number of dedicated board portal systems and software packages available, including our own, further details of which can be accessed here.

During this period of uncertainty and unknown, ongoing and active board engagement is crucial to ensure that business operations can adequately respond to not only the business threats posed by COVID-19, but be sustained for the future.

For more information or to discuss further please contact our corporate services team

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.