Company Directors Meetings Etiquette

Meetings of boards of directors may be either regular or special, the time and place of the former usually being provided for in the by-laws or in the statutes.

Calling a Directors’ Meeting

The by-laws or statutes usually indicate who has the authority to call a meeting of the board of directors. In general, the chairman of the board has this power, or, in his absence, the president.

Quorum Requirements

The presence of a quorum at a directors’ meeting is necessary. The presence and vote of directors owning a majority of the stock is not a substitute for quorum requirements.

When there is no provision in the statutes, charter or by-laws, a majority of the required number of directors is the minimum for a quorum.

Voting

Unless the statutes, charter or by-laws provide otherwise, a majority vote of the directors present (not the full board) is sufficient. Directors cannot vote by proxy.

Who Presides

The chairman of the board, usually the senior officer of the corporation, presides at meetings of the board of directors.

Directors’ Fees

Frequently fees are paid only to those directors who do not receive a salary as officers of the corporation. Some corporations pay no directors’ fees even when all or a number of the directors are not salaried officers of the company. The usual fee is $50 or $100 a meeting, with some of the larger companies paying $500 a meeting. A growing number of corporations are placing their directors on a retainer basis. A quaint custom followed by many corporations is the paying of directors’ fees in bank notes. It is also the custom to distribute the amount appropriated for directors’ fees among those present at the meeting, so that the greater the number of absentees, the larger is the share for each director who attends.

Preparing an Agenda

Several days before the day of the meeting, the secretary of the corporation prepares a list of the things which should be put before the board of directors. This is called the agenda, and when it is printed, matters of a confidential nature are usually omitted.

Agenda form

DATE:                               PLACE::                              TIME:

ORGANIZATION:

CHAIRMEN:

SECRETARY’S READING OF MINUTES:

OFFICERS’ REPORTS:

COMMUTER REPORTS:

OLD BUSINESS:

NEW BUSINESS:

ADJOURNMENT:

The secretary also prepares whatever resolutions he deems necessary to carry out the business of the meeting, consulting with what ever legal or technical advisers are necessary. A copy of each resolution and report, as well as a copy of the order of business and a program of the meeting, are placed on the table at each director’s place on the day of the meeting.

Sending out Notices to the Board

Below are samples of the types of notices used to convene boards of directors. Directors may be notified by telephone of a special meeting called in haste.

Notice of regular meeting of directors

A regular meeting of the Board of Directors of The …………………………… Corporation will be held on ………………………….., 20 ……. at …………………….. (Street) ………………… (City) ………………….. (State).

Business: …………………………………………………………………

………………………………….
Secretary

 ————————————————————————-

Call of regular meeting of directors by president

……………….20……..

To the Directors of ……………………………………… Corporation:

The undersigned, President of the …………………………………………. Corporation, hereby calls the regular meeting of the Board of Directors of said Corporation, to be held at the office of the Corporation, …………………………… (Street) …………………… (City) ………………….. (State), on the ………………………. day of ………………….. 20………, at ……………… o’clock in the …………….. noon.

………………………………………
President

Preparing the Board Room

When corporate directors meet, they are entitled to clean, quiet, comfortable accommodations. The meet- big room must be well aired and tidy and dusted. At each place there should be scratch pads, pencils, and pens. Large ashtrays should be placed on the table so that they are within easy reach of everyone. A water carafe and glasses or paper cups may be placed on a nearby table, or one at each end of the conference table.

Seating the Board of Directors

Meetings of boards of directors are usually conducted in a formal manner. The chairman sits at the head of the directors’ table. Usually the secretary of the corporation sits to his left so that they may consult on the order of business and the secretary may hand the chairman any papers he might need in the course of the meeting. The corporation president sits to the right of the chairman of the board. If a company has no board chairman, then the president presides at board meetings.

What a Director Does

A member of a board of directors must consider conscientiously every question involving the interests of the company. He is expected to act in good faith and with reasonable care and prudence. Each director exercises his independent judgement concerning matters that come before the board, but it is expected that he will take into consideration the views and arguments advanced by the other board members.

Directors occupy positions of trust and confidence and are considered by the courts as standing in a fiduciary relationship to the stockholders and as being trustees for them. They are expected to represent fully the interests of the corporation and may not use their positions of trust and confidence to further their private interests.

While a director need not attend every meeting of the board of which he is a member, he is expected to be present as often as circumstances permit.

Handling Messages During a Board Meeting

Directors may agree that there shall be no interruptions, in which case the telephone operator or the president’s or board chairman’s private secretary takes telephone messages while the meeting is in progress. Of course, when the board is made up of working members of an organization, their own secretaries take their telephone calls as usual.

There may be a telephone in the board room, but only vitally important calls are put through.

In some instances arrangements are made for telephone messages to be brought to the secretary during meetings and he, at his discretion, gives them to the board members involved. Unless they are urgent, he may hold them until the meeting is over.

Bringing Messages to a Board Room

When a message or requested papers are delivered to a board room, it is not necessary for the messenger to knock on the door before entering, unless he has been told not to enter. Usually the messenger goes right in, delivers the note or papers to the secretary, and leaves immediately.

Recording the Minutes of the Meeting

At corporate meetings, the secretary of the corporation usually takes notes. On occasion a stenographer records the entire meeting. If the person keeping such records doesn’t hear something that is said, he or she should speak up immediately and ask to have it repeated. This is considered perfectly proper at a formal business meeting; it is important that the minutes be accurate.

Be the first to comment

Leave a Reply

Your email address will not be published.


*