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Directors’ meetings and requirements

In a previous newsletter we dealt with the topic of shareholders’ meetings and their validity, and what the factors are that should be considered in order to hold a valid shareholders’ meeting or pass a valid shareholders’ resolution. Click here should you wish to revisit that article.

In this article we look at directors’ meetings and requirements relating to these meetings, as set out in the Companies Act, No. 73 of 2008 (the Act).

When should a directors’ meeting be held?

In terms of Section 73 of the Act, a director authorised by the board of a company may call a meeting of the board at any time.

Furthermore, such director must call a meeting of the board if required to do so by:

  • At least 25% of the directors, in the case of a board that has at least 12 members; or
  • Two directors, in any other case.

A company’s Memorandum of Incorporation may specify a higher or lower number than those stated above.

Can a directors’ meeting be conducted via electronic communication?

Yes, a meeting of the board may be conducted via electronic communication, except to the extent that the Memorandum of Incorporation provides otherwise.

One or more, or even all directors, may participate in the meeting through electronic communication, should they not be able to attend the meeting in person.

The requirements to participate in or hold such a meeting are, however, that:

  • The electronic communication facility should enable all persons participating to communicate concurrently with each other without an intermediary; and
  • All persons should be able to communicate effectively.

Should notice be given of a directors’ meeting?

Yes, notice should be given to all of the directors of the board, but if all of the directors acknowledge actual receipt of the notice, or are present at the meeting, or waive notice of the meeting, the meeting may proceed even if the company failed to give the required notice of the meeting or there was a defect in the giving of the notice.

How does voting in a directors’ meeting work?

A majority of the directors must be present at a meeting of directors before a vote may be called, and each director has one vote on a matter before the board.

A majority of the votes cast on a resolution is sufficient to approve that resolution.

In the case of a tied vote:

  • The chair may cast a deciding vote, if the chair did not initially have or cast a vote; or
  • In any other case, the matter being voted on fails.

Should minutes be kept of a directors’ meeting? 

The Act provides that minutes of all meetings and resolutions of directors must be kept, and should be kept for a period of seven years from the date of the meeting.

Furthermore, any resolutions adopted by the board must be dated and sequentially numbered.

Any minutes of a meeting, or a resolution, signed by the chair of the meeting, or by the chair of the next meeting of the board, is evidence of the proceedings of that meeting, or adoption of that resolution, as the case may be.

Should you have any further questions on the matter of directors’ meetings, or any other matter related to the Companies Act, please contact Joanie Viviers at joanie@asl.co.za or 021 840 1600.