Chapter 22
Companies — Directors’ Meetings
[22.1] Table A has been repealed: see [20.10], and a number of ‘replaceable rules’ introduced into the body of the Corporations Law as a result: see [20.9]. In particular, Table A regs 57(2), 61 and 62 have been replaced by new ss 224C, 224D and 226E respectively (all replaceable rules). Table A reg 66(1) has been replaced by new s 226A (replaceable rule), which provides:
(1) The business of a company is to be managed by or under the direction of the directors.
(2) The directors may exercise all the powers of the company except any powers that this Law or the company’s constitution (if any) requires the company to exercise in general meeting.
Meetings of directors
[22.2] Table A reg 70 has been repealed and not replaced.
Conduct of meetings
[22.3] Table A reg 69(1) has been repealed and not replaced.
Convening of meetings
[22.4] Unless the company’s constitution otherwise provides, directors’ meetings may be called by a director giving reasonable notice individually to every other director: new s 248C (replaceable rule). Directors who have appointed alternate directors may ask for the notice to be sent to the alternate director: new s 225A(2) (replaceable rule); see further [22.15].
Notice of meeting
[22.5] If a director who has appointed an alternate director requests, the company must send the alternate notice of directors’ meetings: new s 225A(2) (replaceable rule); see further [22.15]. Table A reg 82 has been repealed and there is no longer provision in the Corporations Law for associate directors (although they may still be provided for in the company’s constitution).
Use of technology
[22.6A] Under new s 248D directors’ meetings may be called and held using any technology consented to by all directors; the consent may be a standing one, and may only be withdrawn a reasonable time before the meeting. Paragraph 10.8 of the Explanatory Memorandum to the Company Law Review Act suggests that the company’s constitution will be able to require directors to consent to specified technologies.
Quorum
[22.7] Unless the company’s constitution otherwise provides, and unless the directors otherwise determine, the quorum for directors’ meeting is two directors, and the quorum must be present at all times during the meeting: new s 248F (replaceable rule).
In the case of alternate directors, new s 225A(3) (replaceable rule) provides that the exercise of a director’s powers by an alternate director is just as effective as if the powers were exercised by the director. Section 60 provides that a reference to a director includes a person occupying or acting on the position of director. Despite these provisions, it is not clear beyond doubt whether alternate directors count towards quorum. There is no longer provision in the Corporations Law for associate directors.
New s 224D(1) (replaceable rule) provides that a person can be appointed as a director in order to make up a quorum for a directors’ meeting even if the total number of directors of the company is not enough to make up a quorum.
Chair
[22.8] Unless the company’s constitution otherwise provides:
• the directors may elect a director to chair their meetings, and determine the period for which that director is to be Chair: new s 248E(1) (replaceable rule);
• the directors must elect a director present to chair a meeting or part of it if a director has not already been elected to chair, or the previously elected Chair is not available or declines to act for the meeting or part of it: new s 248E(2) (replaceable rule); and
• the Chair has a casting vote, in addition to any deliberative vote: new s 248G(2) (replaceable rule).
Adjournment
[22.9] Table A reg 69(1) has been repealed and not replaced. Old s 257 has in the case of general meetings been replaced by new s 249W: see further [21.25]. It is not clear that new s 249W applies to directors’ meetings, and the common law rule may still apply.
Voting
[22.10] Unless the company’s constitution otherwise provides:
• a resolution of the directors may only be passed by a majority of the votes cast by directors entitled to vote on the resolution: new s 248G(1) (replaceable rule); and
• the Chair has a casting vote, in addition to any deliberative vote: new s 248G(2) (replaceable rule).
Minutes
[22.12] New s 251A requires companies to keep minute books in which it records within one month:
• proceedings and resolutions of all general meetings, directors’ meetings and meetings of committees of directors;
• all resolutions passed by members and directors without a meeting: see further [21.30] and [22.13]; and
• in the case of proprietary companies with only one director – the making of declarations by that director.
The minutes must be signed within a reasonable time after the meeting by the Chair of that meeting or the Chair of the next meeting: new s 251A(2). Similarly, resolutions and declarations must be signed by a director (or, in the case of a proprietary company with only one director, by the director) within a reasonable time after being passed or made: new ss 251A(3) and (4) respectively. The requirement that minutes, resolutions and declarations be signed within a reasonable period is new, cf old s 258(1)(b). Under new s 251A(6) a minute recorded and signed in accordance with new s 251A is evidence of the proceeding, resolution or declaration to which it relates, unless the contrary is proved. The minute books must be kept at the registered office or principal place of business in Australia of the company, or another place approved by ASIC: new s 251A(5).
Resolutions without meeting
[22.13] Unless the company’s constitution otherwise provides, the directors may pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document: new s 248A(1) (replaceable rule). Separate copies of the document may be used for signing, provided the wording of the resolution and statement is identical in each copy: new s 248A(2). The resolution is passed when the last director signs: new s 248A(3).
In the case of a company that only has one director, a resolution may be passed or a declaration made by the director recording the resolution or declaration, and signing the record: new ss 248B(1) and (2) respectively.
Resolutions without meeting and declarations must be recorded in the company’s minute books: see [22.12].
Committees of directors
[22.14] Table A regs 76(1) and (2) have been replaced by new s 226D (replaceable rule). The other provisions of Table A reg 76 have been repealed and not replaced.
Alternate directors
[22.15] Table A reg 72 has been replaced by new s 225A (replaceable rule). Under new s 225A(2) the alternate is only entitled to notice of directors’ meetings if the director requests: see further [22.5]. It is not clear whether alternates count towards quorum: see further [22.7].
Associate directors
[22.16] Table A reg 82 has been repealed and there is no longer provision in the Corporations Law for associate directors (although they may still be provided for in the company’s constitution).
Validation of meetings
[22.17] Table A reg 78 has been repealed and not replaced. However, s 226(1) provides that the acts of directors are valid despite any defect that may afterwards be discovered in their appointment or qualification.
