An Overview of Secretarial Standard-1 on Board Meeting

Secretarial Standard-1 on Board Meeting
Karan Singh
| Updated: Sep 29, 2022 | Category: Compliance

Secretarial Standard-1 (SS-1) came into force on 1st July 2015 after being published in the Official Gazette of India on 23rd April 2015. ICSI had released a revised SS-1, which had come into effect from 1st Oct 2017. Any meeting held on or after 1st Oct 2017, except the Meeting for which Notice has been sent before 1st Oct 2017, has to comply with the revised SS-1. Scroll down to check more detailed information regarding Secretarial Standard-1 at the Board Meeting.

As the Company Law are becoming stricter and the ROCs have increased their vigil, it is important to comply with Secretarial Standards in the proceedings of the Meeting & in matters incidental thereto. Secretarial Standard-1 on Board Meeting act as a guide to conducting Board Meeting as per the Companies Act, 2013[1].

What is the Scope of Secretarial Standard-1 on Board Meeting?

Secretarial Standard-1 on Board Meeting is applicable to the Meetings of Board of Directors of all companies registered under the Act except:

  1. OPC or One Person Company in which there is only 1 Director on its Board;s
  2. Company licensed under Section 8 of Companies Act, 2013/Corresponding provisions of any previous enactment thereof.

Section 8 Companies must comply with the applicable provisions of the Act relating to Board Meetings.

Provisions or Clarifications Under Secretarial Standard-1 on Board Meeting

Addition provisions under SS-1 or Secretarial Standard-1 on Board Meeting in the purview of the Guidance Note are highlighted in a tabular form below:

Provisions

Guidance Note

Who Can Convene a Board Meeting

  • Any Director
  • Company Secretary (if any)
  • Any individual authorised by the Board on this behalf, on requisition of a Director

In Consultation With:

  • Chairman
  • In his absence (unless otherwise provided in articles)
  • Managing Director (if any)
  • Whole-time Director (if any)

Day, Time, Place

At any time & place, on any day

Notice Shall be Issued By

  • Company Secretary
  • Any Director
  • Any other individual authorised by the Board for the purpose

Period of Notice

  • Shall be given a minimum of 7 days before the Meeting date, unless the Articles prescribe a longer period.
  • In case Company sends by speed post or by registered post, an additional 2 days shall be added for the service.
  • Meetings are held on pre-determined dates/at pre-determined intervals

Adjournment of the Meeting

The Chairman may adjourn the Meeting for any reason, at any stage of Meeting, unless:

  • Objected
  • Dissented to

By the most of Directors present at a meeting at which a Quorum is present.

To Whom Notice of Meeting will be Given

  • To every Director (Even to original Director even if these have been sent to alternate Directors).

Notice of an Adjourned Meeting

  1. Given to all Directors, including those who didn’t attend the Meeting on the originally convened date.
  2. Unless the adjourned Meeting date is decided at the Meeting, Notice thereof shall be given not less than 7 days before the Meeting.

Mode of Sending Notice (Including Agenda & Notes on Agenda)

  • Mode of Sending Notice shall be decided by Company – by hand or by sped post or by registered post or by email or by facsimile or by any other electronic ways
  • Where a Director states a particular means of delivery of Notice, the Notice shall be given to him or her by such means. However, in case of a Meeting conducted at a shorter Notice, Company or Entity may choose an expedient mode of sending Notice, Agenda & Notes on Agenda.

Address of Sending Notice

  • Where a Director specifies a specific means of delivery of Notice, the Notice shall be given to him by such means.
  • To the postal address or email address registered by the Director
  • Proof of sending Notice, Notes on Agenda & proof of sending Agenda and its delivery shall be maintained by the Company.

Content of Notice

  • The Notice shall specify the date, date, time, serial number, mode & complete address of the venue of the Meeting.
  • Each business item requiring approval at the Meeting shall be supported by a note.
  • Each business item to be taken up at the Meeting shall be serially numbered.
  • Any item or product not included in the Agenda may be taken up consideration with the Chairman’s Permission & with the consent of a majority of the Directors present in the Meeting.
  • Supplementary Notes on any Agenda items may be circulated at or prior to the Meeting but shall be taken up with the Chairman’s permission and with the consent of a majority of Directors present in Meeting, which shall include at least one Independent Director, if any.
  • The Notice shall also contain the email address or contact number of the Chairman or the CS (Company Secretary) or any other person authorised by the Board, to whom the Director shall confirm in this regard.
  • The Notice shall inform Directors regarding options available to them to participate via electronic mode & provide them with all the vital information.

Business Which are in Nature of Unpublished Price Sensitive Information

  • General consent for giving Notes on such items may be taken in the 1st Meeting of the Board held in each financial year & also whenever there is any change in Directors.
  • Notes on these items may be given at a shorter time with the consent of a majority of the Directors, which shall comprise at least one Independent Director.
  • Where General Consent as above hasn’t been taken, the essential consent shall be taken before the concerned items or products are taken up for consideration at the Meeting. The fact of consent been taken shall be recorded in the minutes.

Meeting Conducted at a Shorter Notice

  • The fact that the Meeting shall held at a Shorter Notice shall be specified in the Notice.
  • To transact urgent business, the Notice, Agenda & Notes on Agenda may be given at a shorter period of time than stated above, if at least one Independent Director (ID) (if any) shall be present at such Meeting.
  • If no Independent Director (ID) is present, decisions taken at such a Meeting shall be circulated to all the Directors & shall be final only on ratification thereof by at least 1 Independent Director, if any.
  • In case the Company doesn’t have any Independent Director, the decisions shall be final only on ratification thereof by a majority of the Company’s Director, unless such decisions were approved at the Meeting itself by a majority of Company’s Director.

Frequency of Meetings

  • At least 4 Meetings of its Board in each Calendar Year with a minimum interval of one hundred & 20 days between any two consecutive meetings.
  • 1st Meeting of its Board within 30 days of the Date of Incorporation.
  • Sufficient if an OPC, Small Company/Dormant Company holds one Board Meeting in each half of a CalendarYear & the gap between the 2 meetings of the Board is not less than 90 days.
  • Meetings of Committees as often as necessary prescribed by any law.
  • Meeting of Independent Directors at least once in a Calendar Year.
  • An adjourned meeting being a continuation of Meeting, the interval period in such a case, shall be counted from the date of original Meeting.

Quorum

  • This shall be present throughout the Meeting.
  • Directors participating via electronic mode counted for Quorum unless prohibited.
  • Interested Director not to count in Quorum for the respective transaction.
  • The Board Meeting Quorum shall be one-third of the total Board strength or 2 Directors, whichever is higher.
  • If the total number of Interested Directors exceeds or is equal to two-third of the total strength, remaining Directors present at  Meeting, being not less than 2, shall be Quorum during such item.
  • A meeting shall automatically stand adjourned to the same day in the next week, at the same place & time or if that day is National Holiday, to next succeeding day which is not a National Holiday, at same time & place.
  • In case, if there is no Quorum at the adjourned Meeting, the Meeting shall be cancelled.
  •  Where the number of Directors is lowered below the minimum fixed by the Articles, no business shall be transacted unless the number is 1st made up by the remaining Director (s) or via a General Meeting.

Chairman

Meetings of the Board

  • The Company’s Chairman shall be the Chairman of the Board. If the Company doesn’t have a Chairman, the Directors may elect one of themselves to be the Board’s Chairman.
  • The Chairman of Board will conduct the Meetings of the Board. If no such Chairman is elected/if the Chairman is not able to attend the Meeting, the Directors present at Meeting shall elect any one of them to conduct the Meeting, unless otherwise provided in the Articles.

Meeting of Committees

  • A Committee member appointed by the Board or elected by the Committee as Chairman of the Committee, as per the Act or any other law or the Articles, shall conduct the Committee Meetings. If no Chairman has been so elected if the elected Chairman is not able to attend the Meeting, the Committee shall choose one of its members present to conduct the Meeting of Committee, unless otherwise provided in the Articles.

 

Conclusion

The fundamental principles concerning Secretarial Standard-1 on Board Meeting are laid down in the Act. Secretarial Standard-1 or SS-1 facilitates compliance with these principles by endeavouring to provide further clarity where there is uncertainty & establishing benchmark standards to harmonise prevalent diverse practices.

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Karan Singh

A legal writing enthusiast, a wanderer, and a zealous reader. After gaining a lot of knowledge about the diverse legal topics and developing research skills, Karan joined the league of legal content writers to deliver quality-rich blogs.

 

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