The TaraSpan Blog

Oct 09

Board Meetings through Video Conferencing under Companies Act 2013

Posted on October 09th, by Nisha Sharma 5 Comments

In the world of globalization where India is one of the most lucrative places for investing and doing business, video-conferencing has become the most preferable mode of communication. This is the most convenient and time saving mode of communication and doing meetings. Keeping in view the necessity of this inevitable element in the world of communication, the idea of attending board meetings through video conferencing was first accepted and adopted by Ministry of Corporate Affairs in May, 2011. Further, provisions related to video conferencing got due recognition under the new Companies Act, 2013 and adding to the same, further provisions were introduced in the Secretarial Standards which were mandatorily required to be adopted by the industry from July 2015.

Under the new act the ministry has attempted to bring in more regulations to build and enhance investors’ confidence by notifying whole set of rules for video conferencing. For the first time ministry has introduced the term Board Meetings through Video Conferencing in the act which has resulted into increased level of confidence in the industry and among shareholders. The act has emphasized on the procedure of conducting video-conferencing under the rules namely Rule 3 of the Companies (Meetings of Board and its Powers) Rule, 2014 so that there is no ambiguity while understanding the procedure of adopting the facility. It would be very apt to say that video-conferencing has taken its settled position under Companies Act, 2013 and under Secretarial Standards (I and II) as per the current scenario.

Some points to remember while conducting board meetings through Video Conferencing as per the rules under the act:

  • There should be effective video or audio-visual connection.
  • Due care should be taken to safeguard the integrity of the meeting by ensuring sufficient security and identification procedures.
  • The proceedings of the meetings should be recorded and preserved permanently as specified in the act.
  • Prior acknowledgments shall be taken from the director attending the meeting.

Adding to the provisions, the secretarial standards have increased the liability of compliance officers or company secretaries while conducting meetings by including provisions like maintaining proof of sending notice and its delivery along with acknowledgement of the notice whether the meeting would be attended personally or through video conferencing, time-stamp on minutes, noting the time of closure of meetings, etc. The idea behind setting stringent provisions was to ensure transparency in the management and to ensure that none of the director or member is deceived due to improper documentations and loopholes which existed in the previous act. Thus giving video-conferencing a due recognition under the act and secretarial standards was a good move by the ministry which has certainly boosted the confidence in the corporate. No doubt the level of compliance and the cost incurred thereto has increased and hence there is a huge demand of professionals at the compliance part but as it has always been said that “if compliance is an expense, try non-compliance”, non-complying with the provisions under the act or secretarial standards can cost a lot more to the companies.

Nisha Sharma
Written by Nisha Sharma
Nisha is the Company Secretary of TaraSpan. She has a good hand over Indian Companies Act & Secretarial Matters and a keen learner of allied laws. She loves to upgrade herself with the changes in legal scenario.

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    Parminder Singh
    Parminder October 9, 2015 at 3:22 pm

    Excellent blog Nisha. It is time for video conferencing to come out of the “Video Conferencing Rooms” into the open – on everyone’s desk.

    Reply
      Nisha Sharma
      Nisha Sharma October 12, 2015 at 7:05 am

      Thank you Sir. Indeed video conferencing has a huge scope in our day to day business.

      Reply
    Varsha RAwool February 17, 2016 at 6:19 am

    Hello mam, can you please guide me regarding board meeting through video conference, i need information about the procedure and softwares and related issues.
    thanks & Regards,
    Varsha Rawool

    Reply
    Nisha Sharma
    Nisha Sharma March 1, 2016 at 7:11 am

    Hi Varsha. Kindly refer to Rule 3 &4 of chapter XII (Meeting of board and its power) of Companies Act, 2013 along with secretarial standards. For further information on the same you may contact us here: http://www.taraspan.com/contact-us/?source=LetsTalk

    Reply
    Reshma May 16, 2018 at 4:19 am

    Hi Nisha,
    Will you be able to share the guidelines to be followed for Board meeting video conferencing from Information Security perspective.
    Thanks & Regards,
    Reshma

    Reply

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