What Should Be Discussed at a Board Meeting?

The Board meeting is designed to resolve the contradiction caused by the division of ownership and management functions in a joint-stock company through control over the activities of the executive body.

What are the priorities of the Board of Directors?

The board of directors, by its inherent role, is the main link in the company’s corporate governance system. The main functions of the board of directors are traditionally considered to be strategic management and management control. This applies to any advice, be it a private company or a government-owned company.

The activity of the Board of Directors should focus on critical business improvement issues. These include the company’s strategy, building control over the work of management and its development, as well as helping him in solving problems that go beyond the typical ones.

The work procedure of the Board of Directors assumes that two weeks (at least 10 days) before the meeting, the corporate secretary sends notifications to the directors along with the agenda, voting ballots, and necessary information. Then he collects the written opinions of the directors (if necessary) and transmits them to the chairman.

A meeting of the Board of Directors is legitimate if there is a quorum determined by the company’s charter, but it cannot be less than half of the elected number of directors. The company’s internal documents sometimes stipulate more stringent requirements for determining the quorum when voting on certain issues.

Major questions that should be discussed

One of the main qualities of an effective board of directors is its ability to conduct constructive discussion, discuss different points of view, analyze different options for decisions and their consequences. In order to ensure such a discussion, the board of directors should include people from different professional and life backgrounds.

The Board of Directors solves the following main tasks:

  • discloses information about the joint-stock company;
  • determines the directions of activity of the joint-stock company;
  • defines approaches to investment;
  • draws up plans and budgets of the joint-stock company;
  • creates internal control mechanisms in a joint-stock company;
  • evaluates the performance of the company and its executive management bodies;
  • develops systems and methods of motivation and incentives for personnel working in a joint-stock company;
  • executes decisions of the general meeting of shareholders;
  • creates and maintains a corporate culture.

Accordingly, it is possible to identify the main aspects of the body’s activities, as well as to predict the main aspects that are discussed at the meeting. There are the following questions that should be discussed at a board meeting:

  • How is our adaptive capacity?
  • How are we foreseeing the unforeseeable?
  • How effectively do we recognize, anticipate, prepare for and respond to different situations?
  • How effectively do we anticipate unintended consequences?
  • What might have once been inconceivable – but now seems as if it might become inevitable?
  • What is of concern that, if we don’t address it, can become alarming?

It also should be mentioned, that corporate governance standards dictate that the board of directors holds a special meeting once a year devoted exclusively to discussing strategic issues. A well-developed corporate governance system is designed to ensure a balance between exercising control over the activities of the CEO and providing him with sufficient independence in doing business. Lack of control can lead managers to act in their interests. At the same time, excessive control leads to the politicization of the management decision-making process.