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Board Meeting Through Tele & Vedio Conferencing

Ekta (Practicing CS) (423 Points)

17 July 2009

Dear All,

Can Compay hold BM by Tele and/ or Video conferrencing? If yes, Please provide with section.

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7 Replies

Ajay Mishra (Company Secretary) (74337 Points)
Replied 17 July 2009

Dear Ms. Ekta

Meeting by Video Conferencing

In State of Maharashtra v. Dr Praful B. Desai (2003) the Supreme Court held, as to the question whether recording of evidence by video conferencing is permissible:

“Video conferencing has nothing to do with virtual realty. Advance in science and technology have now, so to say, shrunk the world. They now enable to see and here events, taking place for away, as they are actually taking place. Video conferencing is advancement in science in technology which permits one to see here and talk with someone far away with the same facility and ease as if he is present before you i.e. in your presence. In fact he/she is present before you on a screen. Except for touching one can see, here and observe as if the party is in the same room. In video conferencing both parties are in presence of each other. Recording of evidence by Video conferencing also satisfied the object of providing, in section 273, that evidence be recorded in the presence of the accused. The accused and his pleader can see the witness as clearly as if the witness was actually sitting before them. The advancement of science and technology is such that now it is possible to setup video conferencing equipment in the Court itself for recording the evidence through video conferencing.”

I think this decision of the Court will help You.

Regards

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Kina (Student) (41 Points)
Replied 18 July 2009

Thank U Sir for sharing the information.

kamaljeet (C.S) (51 Points)
Replied 18 July 2009

HI all,

Sorry i disagree with your point Ajay Sir.. The convening of Meeting by an Electronic mode is just recommended in New Companies Bill, which doesnot come in to force till now..So the meeting cannot be convened by electrnic mode until and unless New Companies Bill come in to force..

Ajay Mishra (Company Secretary) (74337 Points)
Replied 18 July 2009

Dear Mr. Kamaljeet

Thanks for updation that the new Companies Bill will consider validity of meeting convened by electronicmode, but the question is what a meeting convened through video conferencing or electronic mode is valid or not ?, if you have any answer on this matter under the Companies Act, 1956, please give this will help to all members of this club to resolve their query.

In my earlier answer i said that the case will help you.

Regard

Ekta (Practicing CS) (423 Points)
Replied 20 July 2009

Thank you very much to both sir...

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Lucknow CA Club (Members) (76 Points)
Replied 19 August 2009

Dear friend,

There appears to be confusion about the holding of Board Meetings of the Companies through electronic medium.

Considering in totality and with a critical mind I think, YES it’s allowed. I couldn’t see if there is anything in the Indian Companies Act 1956 in its present form that prevents holding of Board Meetings of the Companies through electronic medium. All that is required is some clear cut procedures to be adopted and not the amendment to section 285. The new Code merely makes it more specific. At the best there can be an addition to Rules defining the procedures to be followed.

As far as official words are concerned, in May 2002 MCA did announce that in principle a decision had been taken to allow Board Meetings via Electronic Media and J.J. Irani Committee on Company Law which submitted its Report on May 31, 2005 also advocated it.

What happened next, I am not sure?

Its worthwhile to note that Companies like RIL have made provisions in its "Code for Board Meetings" enabling such meetings.

Underneath, I am giving a peek into of the circular No 1 of Security and Exchange Commission, Philippines dated 2001. All a company needs is well defined procedures like this.

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Subject : Board Meeting Through Teleconferencing or Videoconferencing

(Tele/Video Conferencing)

In relation to Section 16 of the Electronic Commerce Act (R.A. 8792) and Section 25 of the Corporation Code of the Philippines (BP68) the following are the guidelines for the conduct of teleconferencing and videoconferencing (i.e. conferences or meetings through electronic medium or telecommunications where the participants who are not physically present are located at different local or international places) of the Board of Directors for the information and guidance of all concerned:

1. The Secretary of the meeting shall assume the following responsibilities:

a. to safeguard the integrity of the meeting via tele/videoconferencing

b. to find good tele/videoconference equipment/facilities

c. to record the proceedings and prepare the minutes of the meeting

d. to store for safekeeping and mark the tape recording/s and/or other electronic recording mechanism as part of the records of the corporation

2. The Secretary shall send out the notices of the meeting to all directors in accordance with the manner of giving notice as stated in the corporate by-laws.

3. The notice shall include the following:

a. Inquiry on whether the director will attend physically or through tele/videoconferencing;

b. Contact number/s of the Secretary and office staff whom the director may call to notify and state whether he shall be physically present or attend through tele/videoconferencing;

c. Agenda of the meeting;

d. All documents to be discussed in the meeting, including attachments, shall be numbered and duly marked by the Secretary in such a way that all the directors, physically or electronically present, can easily follow, refer to the documents and participate in the meeting.

4. If the director chooses tele/videoconferencing, he shall give notice of at least five days prior to the scheduled meeting to the Secretary. The latter shall be informed of his contact number/s. In the same way, the Secretary shall inform the director concerned of the contact number/s he will call to join the meeting. The Secretary shall keep the records of the details, and on the date of the scheduled meeting, confirm and note such details as part of the minutes of the meeting.

5. In the absence of an arrangement, it is presumed that the director will physically attend the Board meeting.

. At the start of the scheduled meeting, a roll call shall be made by the Secretary. Every director and participant shall state, for the record, the following:

a. Full Name

b. Location

c. For those attending through tele/videoconferencing, he shall confirm that:

i. he can completely and clearly hear the others who can clearly hear him at the end of the line

ii. state whether he has received the agenda and all the materials for the meeting

iii. specify type of device used

Thereafter, the Secretary shall confirm and note the contact numbers being used by the directors and participants not physically present. After the roll call, the Secretary may certify the existence of a quorum.

7. All participants shall identify themselves for the record, before speaking and must clearly hear and/or see each other in the course of the meeting. If a person fails to identify himself, the Secretary shall quickly state the identity of the last speaker. If the person speaking is not physically present and the Secretary is not certain of the identity of the speaker, the Secretary must inquire to elicit a confirmation or correction.

If a motion is objected to and there is a need to vote and divide the Board, the Secretary should call the roll and note the vote of each director who should identify himself.

If a statement of a director/participant in the meeting via tele/videoconferencing is interrupted or garbled, the Secretary shall request for a repeat or reiteration, and if need be, the Secretary shall repeat what he heard the director/participant was saying for confirmation or correction.

8. The Secretary shall require all the directors who attended the meeting, whether personally or through tele/videoconferencing, to sign the minutes of the meeting to dispel all doubts on matters taken up during the meeting.

November 20, 2001.

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The section 25 of the Corporation Code of the Philippines is as under which you can compare with section 285 of Indian Companies Act:

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Sec. 25. Corporate officers, quorum. - Immediately after their election, the directors of a corporation must formally organize by the election of a president, who shall be a director, a treasurer who may or may not be a director, a secretary who shall be a resident and citizen of the Philippines, and such other officers as may be provided for in the by-laws. Any two (2) or more positions may be held concurrently by the same person, except that no one shall act as president and secretary or as president and treasurer at the same time.

The directors or trustees and officers to be elected shall perform the duties enjoined on them by law and the by-laws of the corporation. Unless the articles of incorporation or the by-laws provide for a greater majority, a majority of the number of directors or trustees as fixed in the articles of incorporation shall constitute a quorum for the transaction of corporate business, and every decision of at least a majority of the directors or trustees present at a meeting at which there is a quorum shall be valid as a corporate act, except for the election of officers which shall require the vote of a majority of all the members of the board.

Directors or trustees cannot attend or vote by proxy at board meetings.

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Regards

CA Ashutosh Lohani
Cell: +91-9415464475
Regards

CA Ashutosh Lohani
Cell: +91-9415464475