Procedure for organizing board meetings in joint stock companies

Procedure for organizing board meetings in joint stock companies is the basis for ensuring that business management and operations decisions are made legally and effectively. Conducting meetings according to proper procedures not only helps businesses build a transparent and professional governance foundation but also limits legal risks and strengthens trust for shareholders, investors and stakeholders in the business development process.

The role of the board of directors in a joint stock company

The Board of Directors is the management body of a joint stock company, playing a decisive role in corporate operations. According to Article 153 of the Law on Enterprise 2020, the Board of Directors (BOD) has full authority on behalf of the company to make decisions and exercise rights and obligations, except for issues falling under the authority of the General Meeting of Shareholders. Board members must meet the standards and conditions as prescribed in Article 155 of the Law on Enterprise 2020.

According to Clause 2, Article 153 of the Law on Enterprise 2020, the Board of Directors has the right to decide on development strategies, business plans, approve major contracts and supervise executive activities. Specifically, the Board of Directors decides on important issues such as medium-term development strategies, annual business plans, investment plans, market development solutions, and decides to appoint and dismiss key management positions.

Regarding organizational structure, Article 154 of the Law on Enterprise 2020 stipulates that the Board of Directors has from 03 to 11 members, with a term of not more than 05 years and can be re-elected for an unlimited number of terms. Each member of the Board of Directors has one vote, and resolutions of the Board of Directors are passed by voting at the meeting, soliciting written opinions or other forms as prescribed in the company’s Charter.

In which cases is organizing board meetings required?

The Law on Enterprise 2020 clearly stipulates the cases in which organizing board meetings is mandatory. According to Article 157, the Board of Directors must meet in the following situations:

• First meeting;
• Regular meetings;
• Extraordinary meeting.

This is an important legal basis to ensure that corporate governance activities take place continuously and in accordance with regulations.

The first meeting must be held within 07 working days from the end of the election of the Board of Directors for the new term, for the purpose of electing the Chairman of the Board of Directors. This meeting is convened and chaired by the member with the highest number of votes. If there are multiple members with the highest and equal number of votes, the members will vote according to the majority principle to choose a person to convene the meeting.

Regular meetings are held at least once a quarter according to the provisions of Clause 2, Article 157 of the Law on Enterprises 2020. This regulation is to ensure that corporate governance activities take place continuously, arising problems are resolved promptly, helping the enterprise operate stably and develop.

An extraordinary meeting must be convened within 07 working days upon request of: the Board of Supervisors or an independent member of the Board of Directors; the Director/General Director or at least 05 other managers; at least 02 members of the Board of Directors; or in other cases as prescribed by the Company Charter.

Procedure for organizing board meetings in joint stock companies

In the governance of a joint-stock company, organizing board meetings plays a crucial role in ensuring transparent, effective operations and compliance with legal regulations. The procedure for organizing board meetings in a joint stock company is prescribed as follows:

Authority to convene and send meeting notices

According to Article 157 of the Law on Enterprises 2020, the authority to convene a meeting of the Board of Directors belongs to the Chairman of the Board of Directors or an authorized person.

In the case of the first meeting of the new Board of Directors term, the member with the highest number of votes will convene the meeting. The process of sending meeting notices must comply with the provisions of Clause 6, Article 157 of the Law on Enterprises 2020.

The Chairman of the Board of Directors must convene a meeting within 07 working days from the date of receiving requests from subjects with the right to request. If the Chairman of the Board of Directors does not convene a meeting as requested, the person requesting has the right to convene the meeting instead, and the Chairman of the Board of Directors must be responsible for any damage caused to the company.

The meeting invitation must be sent at least 03 working days before the meeting date, unless otherwise stipulated in the company charter. The notice must specifically identify the time, location, program, issues discussed and decisions. The notice must be accompanied by documents used at the meeting and voting slips. Notices can be sent by invitation, telephone, fax, electronic means or other methods according to the Company’s Charter.

Conditions for conducting the meeting

Conditions for a Board of Directors meeting to be conducted legally are specified in Clause 8, Article 157 of the Law on Enterprises 2020. Specifically, a Board of Directors meeting can only be conducted when three-quarters (3/4) or more of the total number of members attend the meeting. This regulation is intended to ensure the representativeness and validity of adopted decisions.

In case the meeting convened for the first time does not have enough members attending as prescribed, the meeting must be convened a second time within 07 days from the intended date of the first meeting. The second convened meeting is conducted if more than half of the members of the Board of Directors attend the meeting.

Clause 9, Article 157 of the Law on Enterprises 2020 stipulates that members of the Board of Directors are considered to attend and vote at the meeting in the following cases: attending and voting directly; authorize another person to attend the meeting (if approved by a majority of the Board of Directors); Attend and vote via online conference or other electronic form; Send voting ballots to the meeting via mail, fax, email or other means as prescribed.

Conduct meetings and make decisions

The process of conducting Board of Directors meetings and making decisions must comply with the provisions of Article 157 and Article 158 of the Law on Enterprises 2020. Article 157 regulates the adoption of Board of Directors resolutions, while Article 158 provides detailed regulations on Board of Directors meeting minutes, ensuring the legality of passed decisions.

The meeting is chaired and managed by the Chairman of the Board of Directors or an authorized person. Meeting content includes:

• Discuss and decide on issues according to the announced program.
• Voting is by direct ballot or in writing (voting ballots must be sent before opening time and opened in the presence of attending members).

According to Clause 12, Article 157 of the Law on Enterprises 2020, resolutions and decisions of the Board of Directors are approved if approved by the 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. The company’s charter may stipulate a higher voting percentage to pass resolutions.

Minutes of the Board of Directors meeting must be prepared according to the provisions of Article 158 of the Law on Enterprises 2020, including the following main contents:

• Name, head office address, business code;
• Meeting time and location;
• Purpose, agenda and meeting content;
• Full name of each member attending the meeting or person authorized to attend the meeting and how to attend the meeting;
• Full names of members not attending the meeting and reasons;
• The issue was discussed and voted on at the meeting;
• Summarize the opinions of each attending member according to the order of the meeting’s progress;
• Voting results clearly state members who approve, disapprove and have no opinion;
• The issue has been passed and the corresponding voting rate;
• Full name, signature of the chairperson and the person taking the minutes, except for the case specified in Clause 2, Article 158 of the Law on Enterprises 2020.

Meetings of the Board of Directors must be minuted and may be audio-recorded, recorded and stored in other electronic forms. Minutes must be made in Vietnamese and may be made in a foreign language.

>>> Reference: Procedure for organizing a general meeting of shareholders in a joint stock company.

Frequently asked questions about the process of organizing board meetings in a joint-stock company

Here are some frequently asked questions:

Can a member of the Board of Directors authorize a person who is not a member of the Board of Directors to attend a meeting?

According to the provisions of Clause 9, Article 157 of the Law on Enterprises 2020, members of the Board of Directors can authorize others to attend the meeting if approved by the majority of members of the Board of Directors. However, it should be noted that this authorization must comply with the provisions of the company charter and the authorized person will exercise voting rights on behalf of that member of the Board of Directors.

In what cases are members of the Board of Directors not allowed to vote?

A member of the Board of Directors is not allowed to vote on transactions that bring benefits to that member or related person as prescribed in Article 167 of the Law on Enterprises 2020. Specific cases include: contracts worth 20% or more of the total asset value between the company and that member or related person; and other transactions in which members of the Board of Directors or related persons have interests and those interests conflict with the interests of the company.

Can Board of Directors resolutions be passed in the form of written comments?

Yes, according to the provisions of Article 157 of the Law on Enterprises 2020, resolutions of the Board of Directors can be passed by collecting written opinions. This method is especially useful when urgent decisions need to be made without the opportunity to hold a face-to-face meeting. Resolutions passed in this form have the same legal value as resolutions passed at a direct meeting.

How to handle when a member of the Board of Directors refuses to sign meeting minutes?

When a member of the Board of Directors refuses to sign the meeting minutes, according to Clause 2, Article 158 of the Law on Enterprises 2020, if there are full signatures of the chairman and the person taking the minutes, the minutes will still be valid. However, it is necessary to clearly state the member’s refusal to sign and the reason (if any) in the meeting minutes to ensure transparency and completeness of the minutes.

How long do Board meeting minutes need to be kept?

Minutes of meetings of the Board of Directors must be kept at the company’s headquarters throughout the operating period of the enterprise according to legal regulations on archiving. Specifically, according to current regulations, these minutes are documents that need to be stored long-term because they relate to the legitimate rights and interests of the company, shareholders and related parties.

How long does it take for Board of Directors resolutions to be disclosed?

For public companies, the Board of Directors resolution must be disclosed within 24 hours from the date of approval according to the provisions of Circular 96/2020/TT-BTC. The announcement must be made on the company’s website, the State Securities Commission and the Stock Exchange (if the company is listed or registered for trading).

Does the Board of Directors meeting need to invite the Supervisory Board to attend?

According to Article 157 of the Law on Enterprises 2020, the Board of Directors have the right to attend meetings of the Board of Directors, have the right to discuss but cannot vote. Inviting the Supervisory Board to participate helps enhance supervision and transparency in corporate governance activities.

Is it mandatory to record the Board of Directors meeting?

Not required, but according to Article 158 of the Law on Enterprises 2020, the Board of Directors meeting can be recorded, recorded and stored in other electronic forms depending on the company’s regulations. Recording helps ensure the accuracy of meeting minutes and is important evidence in case a dispute arises.

Consulting services for organizing board meetings at Long Phan Consulting Company

Long Phan Consulting Company provides professional consulting services on organizing Board of Directors meetings for joint stock companies in Vietnam. Our services help businesses comply with legal regulations and optimize the decision-making process.

Long Phan Consulting Company supports businesses:

• Consulting on legal regulations on organizing meetings of the Board of Directors in joint stock companies.
• Draft, check and complete documents and meeting convening notices.
• Support the organization and management of Board of Directors meetings in accordance with legal regulations.
• Draft meeting minutes, resolutions and related documents.
• Representing customers to handle disputes arising related to Board of Directors meetings.
• Consulting and supporting in handling legal issues arising during the operation of the Board of Directors.

Long Phan Consulting Company always updates the latest regulations on corporate governance to ensure maximum benefits for customers.

Conclude

The process of organizing board meetings in a joint stock company requires strict compliance with the provisions of the Law on Enterprises 2020. To ensure effective corporate governance activities and avoid legal risks, customers who need in-depth advice on the process of organizing a Board of Directors meeting, please contact Long Phan Consulting Company immediately via the hotline 1900636389 to receive timely and professional support.