Procedures for inviting meetings of the Board of Directors

Inviting meetings of the Board of Directors is an important procedure in business management and operations. The Board of Directors plays a central role in making strategic decisions of the enterprise. Organizing regular and effective Board of Directors meetings is an important factor to ensure the company’s operations stay on track. The following article by Long Phan provides a detailed analysis of aspects related to procedures for inviting meetings of the Board of Directors.

When does the Board of Directors meeting take place?

Board of Directors meetings are held in three main cases according to the provisions of law:

Case 1: Election of Chairman of the Board of Directors

Case 2: There are suggestions from competent people, specifically:

1. Supervisory Board, or;
2. Director/General Director, or;
3. From 02 executive members of the Board of Directors, or;
4. 05 other managers.

Case 3. Convene extraordinary meetings

Legal basis: Clause 2, Article 154 and Clauses 1, 2, 3, Article 157 of the Law on Enterprises 2020.

Subjects participating in the Board of Directors meeting

The main participants in the Board of Directors meeting include two groups: Board members and independent members of the Board of Directors. Specifically as follows:

1. Members of the Board of Directors: Belonging to a group of 3 – 11 shareholders elected to the Board of Directors, members have the right to participate in Board meetings. To become a member of the Board of Directors, members must meet the conditions specified in Clause 1, Article 155 of the Law on Enterprises 2020:

• Have professional qualifications and experience in business administration or in the company’s field, industry, and business lines and do not necessarily have to be a shareholder of the company, unless otherwise stipulated in the company’s charter;
• Not belonging to the group of subjects who do not have the right to manage and establish businesses: state agencies, armed units; officials, civil servants and public employees; officers, non-commissioned officers, people working in the police sector; people are being prosecuted for criminal liability…

1. Independent members of the Board of Directors: According to Clause 2, Article 155 of the Law on Enterprises 2020, unless otherwise prescribed by securities laws, independent members also have the right to attend meetings like members of the Board of Directors if they meet the following requirements:

• Not a person working for the company, its parent company or a subsidiary of the company; not be a person who has worked for the company, parent company or subsidiary of the company for at least 3 consecutive years;
• Not be a person receiving salary or remuneration from the company, except for the allowances that members of the Board of Directors are entitled to according to regulations;
• Not a person whose spouse, biological father, adoptive father, biological mother, adoptive mother, biological child, adopted child, biological brother, biological sister, or younger sibling is a major shareholder of the company; is a manager of the company or a subsidiary of the company;
• Not a person who directly or indirectly owns at least 01% of the company’s total voting shares;
• Must not be a person who has served as a member of the Board of Directors or Supervisory Board of the company for at least the previous 5 consecutive years, unless appointed for 2 consecutive terms.

In what cases is a member of the Board of Directors considered to attend and vote at the meeting?

Pursuant to Clause 9, Article 157 of the Law on Enterprises 2020, it specifically stipulates the cases in which members of the Board of Directors are considered to attend and vote at the meeting as follows:

• Attend and vote directly at the meeting;
• Authorize another person to attend the meeting and vote according to the provisions of Clause 11 of this Article;
• Participate and vote via online conference, electronic voting or other electronic forms;
• Send voting ballots to the meeting via mail, fax, or email;
• Send voting ballots by other means as prescribed in the company charter.

Procedure for organizing meetings of the Board of Directors

The process of organizing a Board of Directors meeting includes four main steps specified in Articles 157 and 158 of the Law on Enterprises 2020. Specifically, the step process is as follows:

Step 1: Propose to open a meeting of the board of directors

• The Chairman of the Board of Directors must convene a meeting of the Board of Directors within 07 working days from the date of receiving the request from the competent persons.
• In case of failure to convene a meeting of the Board of Directors as requested, the Chairman of the Board of Directors must be responsible for any damage caused to the company; The requester has the right to replace the Chairman of the Board of Directors to convene a meeting of the Board of Directors.

Step 2: Send meeting invitations

• The Chairman of the Board of Directors or the person convening the meeting of the Board of Directors must send a notice inviting the meeting no later than 03 working days before the meeting date if the company charter does not provide otherwise. The meeting invitation must specifically identify the meeting time and location, program, issues discussed and decisions. Attached to the meeting invitation notice must be documents used at the meeting and members’ votes.
• Notice of invitation to a meeting of the Board of Directors can be sent by invitation, phone, fax, electronic means or other methods prescribed by the Company’s Charter and guaranteed to reach the contact address of each member of the Board of Directors. The administrator is registered at the company.
• The Chairman of the Board of Directors or the convenor sends the meeting invitation notice and accompanying documents to the Controllers as for members of the Board of Directors. Controllers have the right to attend meetings of the Board of Directors; have the right to discuss but not vote.

Step 3: Organize Board of Directors meetings

• A meeting of the Board of Directors is conducted when three-quarters or more of the total number of members attend the meeting.
• If convened a second time, only one-half or more of the members need to attend the meeting. Meetings of the Board of Directors must be minuted and may be audio-recorded, recorded and stored in other electronic forms. The chairman, the person taking the minutes and those signing the minutes must be responsible for the truthfulness and accuracy of the content of the minutes of the Board of Directors meeting.
• When opening a meeting, the chairman and secretary of the meeting must be elected. The chairman is the person who controls and stabilizes the order of the meeting. Members of the Board of Directors attending the meeting discussed and voted on the issues raised in the meeting agenda. In case of sending voting ballots to the meeting via mail, the voting ballot must be in a sealed envelope and must be delivered to the Chairman of the Board of Directors no later than 01 hour before the opening. Voting ballots may only be opened in the presence of all meeting attendees.

Step 4: Approve resolutions and decisions of the Board of Directors

• Except in cases where the company’s charter stipulates a higher ratio, resolutions and decisions of the Board of Directors shall be passed if approved by a majority of members attending the meeting; In case the number of votes is equal, the final decision belongs to the side with the opinion of the Chairman of the Board of Directors.

Consulting services for inviting meetings of the Board of Directors

Consulting service for conducting Board of Directors meetings is a professional service to support businesses in organizing meetings effectively and in compliance with legal regulations. At Long Phan, we can advise you effectively during the implementation and meeting preparation process, contributing to improving the quality of corporate governance. Long Phan’s services include:

• Answer questions related to regulations on the Board of Directors and decision making.
• Support businesses in drafting meeting-related documents such as meeting invitations, meeting agendas, meeting minutes, ensuring full compliance with legal regulations and the company charter.
• Provide detailed instructions on the meeting organization process, from preparation to completion, ensuring all work goes smoothly and according to regulations.
• Consulting on some issues related to meeting content.

Procedures for inviting meetings of the Board of Directors, when implemented in accordance with the provisions of the Enterprise Law and the Company’s Charter, will help businesses operate more effectively and transparently. To receive professional support in organizing Board of Directors meetings according to procedures, efficiency and legality, you can contact Long Phan via hotline. 0906735386. Our team of experts will provide detailed advice and support you throughout the implementation process.