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:
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.