Director Meetings for Corporations

The Board of Directors is typically required to have an annual

meeting pursuant to the Bylaws, but is likely to have meetings more often than that. Regular meetings of the Board typically take place monthly or quarterly, and are specified in the Bylaws. Special meetings may be held when necessary but may only be held upon proper notice, generally at least two days' notice is required.

Some of the actions that may be necessary or desirable for Board approval include the following:

• Amending the Articles of Incorporation or Bylaws (unless only shareholders are allowed to amend pursuant to Articles of Incorporation or Bylaws);
• Entering into major contracts, leases, or other obligations;
• Adopting a stock option plan;
• Borrowing significant sums and providing the security for the loans;
• Declaring distributions, dividends, or stock splits;
• Issuing securities and granting warrants, options, or other rights to purchase securities;
• Entering into Employment Agreements with key employees;
• Electing officers of the corporation and setting or changing their compensation and terms of employment;
• Adopting or amending employee benefit plans;
• Calling shareholders' meetings;
• Buying or selling significant assets; and
• Adopting company policies.

Director Action by Consent

It is acknowledged that there may be instances where it is difficult for directors to physically attend required meetings. Similar to shareholder meetings, the Board of Directors may also conduct business by unanimous consent without holding a meeting. Check your state's corporation statute for procedural requirements for unanimous written consent of directors without holding a meeting. This authorization for action by unanimous written consent is also typically included in the Bylaws.

Voting

Corporate Bylaws should address quorum and voting requirements. Voting requirements may also be addressed in the Articles of Incorporation. State corporation statutes will also address issues of quorum and voting requirements.

Quorum

Most states permit a Board of Directors to consist of "one or more directors." It is a good idea to have an uneven number of Directors for voting purposes. The number of directors is either stated in the Articles of Incorporation or in the Bylaws. When there is a fixed number of board members, a quorum exists whenever a majority of that number is present, except when a supermajority is required for certain matters.

Supermajority

A supermajority is a requirement greater than a simple majority, which is more than fifty percent. Certain substantial corporate actions might require a supermajority requirement.

Proxy Voting

Directors typically may not vote by proxy, unlike shareholders. Most states allow directors to participate in regular or special meetings by a telephone conference call. Allowing attendance by telephone is an acceptance of the practical reality that not all directors will always be physically available to attend Board meetings. If this practice is to be allowed by your corporation, it should be included in the Bylaws.

Minutes and Written Consent

The actions taken by the Board of Directors at all of its meetings must be reflected in minutes of the meetings. Actions taken by written consent will also be reflected in the minutes.

Sample minutes, resolutions, and consents are available for review in the Forms & Agreements section of AllBusiness.com.