Meetings are an integral part of how companies can make effective decisions and offer a platform for discussions on major strategic decisions.
They may be held for a specific reason or to discuss a host of issues affecting the mechanics and success of the firm.
In this blog, we will focus on the holding of effective board meetings and how to improve board meetings in general.
Why Do We Hold Meetings?
The ICAEW states that board meetings may have five main objectives:
- Strategy: To agree on and analyse the effectiveness of the company’s current (and future) strategies.
- Operations: To ensure that the operational side of the firm is in cohesion with its strategy.
- Finance: To discuss the past, present and projected financial performance of the company.
- Compliance: To ensure the company’s procedures are compliant in areas such as company law and health and safety regulations.
- Brainstorming: To take advantage of the expertise of non-executive directors on the board in respect of considering alterative approaches and ‘thinking outside the box’.
Who Will Attend?
Creating an effective board is likely to increase the success of the meeting.
One of the most important people at the meeting is the chairperson, so having the right chairperson in place is pivotal.
Ideally, the chairperson would hold strong leadership qualities, have the ability to create an effective team, command respect of all stakeholders, and accept all opinions and comments objectively and fairly.
The chairperson must also maintain a strong relationship with the secretary of the company, or the minute taker if no secretary is in place. The secretary’s role at the meeting is to assist the chairperson with the operations of the meeting, such as vote counting if necessary, and the taking of minutes.
It is important for the board members to reach a compromise on the overall objectives of the company and the meeting. For example, those on the board might have differing opinions on a certain item; however, by asking each board member for their opinion, an effective board will come to a practical agreement on that item.
Lastly, by appointing effective non-executive directors to the board, the board (and company) gains an independent opinion on its corporate strategy and benefits from industry expertise.
Non-executive directors must have a strong character and be free to provide their open and honest opinion on business strategy, particularly when making difficult decisions. In short, non-executive directors can be utilised as agents of change.
What Documentation Should Be Provided In Advance?
To ensure the board is adequately informed before the meeting, all attendees should be in possession of supporting documentation relating to the meeting such as, but not limited to, the following:
- The Agenda.
- Minutes of the previous meeting
- Management accounts (if applicable)
- Documentation relating to specific items on the agenda, such agreements or proposals to be considered.
It is essential that the chairperson ensures that a quorum is present at the meeting and can improve the meeting by:
- Creating an open environment for discussion.
- Encouraging more introverted directors to provide their opinions.
- Ensuring order in maintained throughout the meeting.
- Reiterating and summarising the key points at the end of each discussion area.
- Being assertive in delegating responsibilities.
In addition, a date of any future meetings should be agreed as soon as possible after the holding of the current meeting.
The minutes of the meeting should be succinct enough to record the key points, such as actions agreed, whilst noting the importance of the meeting. The minutes should also be prepared as soon as possible after the meeting to ensure accuracy is retained.
Where applicable, and where decisions have been made at the meeting, the relevant parties in the company should also be made aware of these accordingly.
As demonstrated in this blog, board meetings act as a major asset to a company and, by improving running of the meeting, the benefits to the company can be increased substantially.
Pearse Trust has over 30 years' experience in incorporating, structuring and managing companies. We also have an extensive knowledge and expertise in compliance and company secretarial services, so that we can assist you with all your corporate governance requirements. Call us today on +353 1 634 9500 to discuss how we may be of service to you.