Board meetings are a requirement of the Companies Act 71 of 2008 (the “Act”), as envisaged in section 73 of the Act. Section 73(1)(a) and (b) of the Act reads as follows:

73(1) A director authorised by the board of the company:

1. may call a meeting of the board at any time; and
2. must call such meeting if required to do so by at least-
3. 25% of the directors, in the case of a board that has at 12 members; or
4. two directors, in any other case.

For your board meeting to be effectively and efficiently conducted, a number of elements need to be in place, not least of which is the preparation and circulation of board packs. The board packs provide the directors with the relevant information needed to place them in a position where they could apply their mind properly to the matters at hand in order to discharge their statutory and fiduciary duties.

This article will focus on the preparation of board packs as a necessary part of the preparation for a board meeting.

The level of detail to include in your board packs

The documents for inclusion in board packs should be as clear and informative as possible, indicating the purpose of each document, and simultaneously ensuring that the directors are properly informed about the matter. Sufficient information is required to allow the board to undertake its deliberations.

The level of detail required should be counterbalanced against the risk of providing too much information. This should be considered carefully as providing too much information could result in important information becoming shrouded in irrelevant details which could create confusion on the part of the recipient of the board pack.

The key question to ask is: what is the relevant information the board requires to make an informed decision?

Guidelines for your board packs

Developing guidelines on how to present board packs is a key element of good corporate governance, and it is very important for those guidelines be communicated to staff who prepare board packs.

The guidelines should ensure that board documents:

• Use clear and “easy to understand” language
• Are consistent in terms of format and layout usage
• Clarify upfront whether a matter is for noting, discussion or for decision
• Contain a clear recommendation, and the exact wording of the proposed resolution, if directors are asked to consider and pass a resolution
• Contain sufficient information to provide for an informed decision by the directors

Submitting your board packs

It is common practice to circulate the board packs to the board with sufficient time in advance of any meeting to ensure there is ample time for them to familiarise themselves with the contents. Ideally, board packs should be circulated to the directors at least 7 (seven) days before the meeting.

Establishing a board meeting year planner at the beginning of the year is another essential element of good corporate governance. This will effectively guide the board in providing for regular agenda items to be discussed at all meetings, or at particular meetings.

It is suggested that a process of submitting the board packs to the board should be established. Despite the implementation of the process to ensure board packs are circulated prior to the meeting, documents may from time to time need to be tabled, and it is important that directors have sufficient opportunity to read and consider tabled documents.

Tabled documents can be problematic for directors who are not attending the meetings in person. If these directors can’t be provided with a copy of the tabled document electronically, then the document should – if practical – be read aloud to them. If neither is possible, then the director concerned should be given the opportunity to abstain from voting on any decision related to the tabled document and the minutes of the meeting should record their abstention and the reason for the same.

The length of time to keep your board packs for

Board packs should be retained in accordance with section 24 of the Act. Section 24(1)(a) and (b) of the Act read as follows:

24(1) Any documents, accounts, books, writing, records or other information that a company is required to keep in terms of this Act or any other public regulation must be kept:

1. in a written form, or other form or manner that allows that information to be converted into written form within a reasonable time; and
2. for a period of seven years, or any longer period of time specified in any other applicable public regulation, subject to subsection 2.

It is therefore important to ensure that:

• Hard copies are maintained for each board meeting which includes a complete set of board pack and copies of all documents tabled at the meeting. Confidential documents subject to legal professional privilege or HR papers should be kept separately.
• Electronic copies of the board pack and tabled documents should be kept whenever possible as this could be an alternative to a hard copy, should it be lost or misplaced.
• When documents are tabled, the name of the author, that author’s title and the date of the document should be noted on the document itself.