Board meetings during the crisis
What is it?
A board meeting is basically a meeting of the directors. This is different from a general meeting, which is a meeting of the members (shareholders) of a company. Of course, in many SMEs the directors are often also the only shareholders.
The rules. In the UK there is no statutory requirement for private limited companies to hold board meetings. However, the company’s articles of association might include a requirement for board meetings. While you can’t face legal action for failing to meet, it could imply mismanagement by the shareholders or creditors in the event the company runs into trouble. Tip. Check your company’s articles for details of any requirement to hold board meetings. If it isn’t suitable, it’s easy to change the terms or even remove the clause by passing an ordinary resolution.
How often? Though you might not have to hold these meetings, best practice is to have them regularly, e.g. every month. But some small businesses have never had one. Coronavirus will have changed this, so how do you get the best from these meetings?
Set an agenda
The aim of a board meeting is to provide a forum to consider and discuss, in a formal way, how the company is to be run and how it’s to carry on its business (in this case in a crisis). As always, the best meetings are those that have some form, focus and structure to them. Draw up the agenda in advance to give each director time to think about the topics being discussed.
Responsibilities. Each director should have oversight of certain aspects of the business. Whoever is in charge of health and safety should be keeping track of advice from the NHS in relation to washing hands, contact, etc. The person with responsibility for staff will be able to provide updates on numbers already off sick, staff impacted due to school closures, homeworking practices, etc. The finance director will be keeping tabs on cash flow, business support, changes to rates or tax, etc. Tip. One person can’t possibly keep up with every impact the outbreak will have on the company. Ensure that directors have responsibilities so they can feed back regularly into future meetings. This will help to flag any issues, from supply or staff shortages to the availability of state support and issues with cash flow and new ideas to adapt the business.
Take minutes. Where you do have board meetings, company law requires that you keep proper minutes. This doesn’t mean that every word said has to be noted down, but an accurate record of what has been discussed as well as the actions to take is essential. Tip. Make sure that someone is taking notes for the meeting and then following up afterwards with the record and points of action for individuals. This will allow you to keep tabs on what is being done and ensure that nothing is forgotten in the inevitable chaos.
Good practice
Though the coronavirus outbreak will force many businesses to hold more regulator director meetings, this should not be seen as a bad thing. Over the years plenty of surveys have shown that businesses where the directors (and managers) meet frequently to discuss decisions are more successful than those which don’t.
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