WHY BOARD MEETING MIGHT BE PREFERRED OVER BOARD’S CIRCULAR RESOLUTION?

Choosing between a meeting and a circular resolution depends on several factors, including urgency, complexity, and regulatory requirements.

Here’s why a meeting might be preferred over a circular resolution:

1. Complex Discussions & Decision-Making

• • Meetings allow for real-time discussions, clarifications, and debate, which can be crucial for complex or strategic decisions.
  • Circular resolutions only collect votes without discussion, which may lead to misunderstandings or uninformed decisions.

2. Legal & Regulatory Requirements

• • Companies Act 2016 requires certain decisions such as removal of director, removal of auditor, board’s solvency declaration and directors’ fees to be made in a formal meeting rather than via a circular resolution.

3. Transparency & Accountability

• • Meetings ensure that all stakeholders participate actively and voice their opinions, which increases accountability.
  • Circular resolutions might lead to passive approvals without thorough review by directors or shareholders.

4. Sensitive or Controversial Matters

• • If a decision is likely to be contested or requires consensus-building, a meeting allows for persuasion and negotiation.
  • A circular resolution does not facilitate direct communication, making it difficult to resolve differing opinions.

5. Documentation & Record-Keeping

• • Meetings provide detailed minutes that document discussions, rationale, and dissenting opinions, which can be useful for future reference or legal purposes.
  • Circular resolutions only record the final decision without context.

6. Urgency & Availability of Members

• • If board members are readily available, a meeting ensures faster decision-making rather than waiting for written approvals.
  • However, if members are geographically dispersed and the matter is straightforward, a circular resolution might be more practical.

Would you like advice on a specific scenario where you’re deciding between the two? Please contact for more information.