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COMPANIES ACT of 2008 Relating to Board Meetings

Overview of the Companies Act and its effects on Board Meetings

Company law and corporate governance in South Africa is principally established through the Companies Act 3 of 2008 (the Act). The Companies Act contains a plethora of provisions, a number of which regulate the conduct, constitution and execution of a company’s board meetings. 

Board meetings are the primary way in which the company’s directors exercise their powers and functions to direct the affairs of the company. Directors exercise these powers by passing resolutions at meetings that have been properly convened.

Board Meeting Restrictions

The Companies Act imposes few restrictions on board meetings compared to that of shareholder meetings - but there are nonetheless restrictions imposed by Section 73 of the Companies Act. 

This section details when directors can or must call meetings, how they must provide notice for such meetings, how they can ratify resolutions taken at meetings that were not quorate, amongst other things. 

Most importantly, section 73(3) of the Act allows companies to conduct these meetings electronically, or through electronic communication, as it is defined in the Electronic Communications and Transactions Act 25 of 2002.

The only requirements for the validity of these electronic meetings are that each participant can participate directly - in other words, not through an intermediary - and that they can participate effectively. This means that joining a an electronic board meeting with an electronic meeting software like Zoom is legally the same as being physically present at the meeting.

Board Meeting Notice

Notice of an upcoming board meeting can legally be delivered to directors via email.

There may also be provisions in a company’s Memorandum of Incorporation that restrict electronic meetings, or the kinds of resolutions that can be passed at electronic meetings.

Note: This content relates specifically to South African Law. We will be posting specific content for UK and USA law in due course.