After almost 13 years of constant request by the industry, Ministry of Corporate Affairs (MCA) considers Directors attending Board / Committee Meetings through video conferencing as valid quorum. Read the circular here http://goo.gl/HhI1f. I remember program co-ordinating Companies Bill, 1997 held by Institute of Company Secretaries of India.
– Electronic mode means video-conference facility.
– Notice for the Meeting to clearly provide details of the video-conference facility and how to participate.
– Director to confirm specifically on their mode of participation – physical or electronic mode.
– A roll call would be made before the commencement, re-commencement and conclusion of the meeting to ensure presence of quorum through out the meeting.
– Voting: Chairman / Secretary should call the roll and note the vote of each director who should identify herself.
– Chairman at the end of the meeting shall announce the summary of decisions taken in that meeting and names of directors who have consented/ dissented.
– Adequate security measures to be taken to ensure proper video conference facilities, that only authorized persons to participate and the like.
But there is a surprise. The Circular requires that every director must attend a Board / Committee meeting ‘personally’ at least once in the financial year. This goes against the current Companies Act requirement that a director can take leave of absence and there is no mandatory requirement of having to be present for one meeting.
MCA also has provided for participation of shareholders through video-conferencing. But it is only ‘participation’ and it would not be counted as ‘quorum’. Quorum for shareholder meeting would still be 2 shareholders physically present in a private limited company and 5 in a public limited company. You can find the Circular here http://goo.gl/STn9s.
Disclaimer: This is not a legal opinion and should not be construed as one. Please speak with your attorney for any advice.