Clarification on Green initiative in the Corporate Governance Participation by Directors in meetings of Board / Committee of Directors under the Companies Act, 1956 through electronic mode
Green initiative in the Corporate Governance, the much talked about topic these days, brings another set of relaxation to the Registrar of Companies, the Directors and lastly the company™s valuable assets the Shareholders. Lets have a brief run through over the circulars that™s been issued by the Ministry today.
The Registrar of Companies, now, get to issue all the certificates to the companies and other stakeholders as required under the provisions of Companies Act, 1956 read with Companies Regulation, 1956 via e-mode under its digital signature even the standard letters given to the companies. Thus taking less time from now on and the first set becomes available for issue by 30th June, 2011 in phased manner.
The Directors are allowed to participate by means of video conferencing, where all can meet, communicate easily residing at their respective places. There are a list of procedures which needs to be followed sincerely once implementation of the process; some to mention are :
- Every Director must attend personally at least one meeting, a financial year of the company.
- Now Directors attending through Video Conferencing will also be counted for the purpose of quorum.
- Notice of the Board Meeting shall clearly mention the directors availability of participation through the electronic mode and give information to access the facility.
- Notice seeking confirmation of the presence of Director- physically or through video conferencing.
- Roll call will be necessary at the start and at the end of the meeting.
- At the close of the meeting, the Chairman shall announce the summary of the decisions taken in that meeting in respect to the agenda item and names of the directors in favor and not in favor with it. The video recording of this specific part of the meeting would be preserved for an year.
- Draft minutes of the meeting shall be circulated in soft copy not later than 7 days of the meeting for comments / confirmation to the directors who attended the meeting to dispel all doubts on matters taken up during the meeting. Thereafter, the minutes shall be entered in the minute books as prescribed under section 193 of the Act, The minutes shall also disclose the particulars of the Directors who attended the meeting through electronic mode.
The Shareholders are not far behind in getting the advantage of video conferencing as they too become the part of it, the step taken is to have larger amount of participation of the shareholders and comforting their pockets saving cost, time both essential and valuable.
Further the listed companies are required to provide video conferencing connectivity in at least top 5 places in India based on the maximum number of members or at least 100 members whichever is more, residing as per the address registered with the depositories.
So it™s a welcoming initiative from the Ministry which is truly honorable by the millions who operate through this with this on daily basis.
Circulars issued by MCA:
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