Module 3 · Chapter 6

Meetings, Quorum and the Decision That Did Not Count

A board decides only at a meeting with a quorum, or by a written resolution that every eligible director signs. This chapter shows why a paper most of the directors signed decided nothing.

≈ 11 min read 8-question test

In this chapter

  • How a board meeting is called, and how fast it can be called
  • Why the quorum needs an independent director, and a written resolution needs everyone
  • Who section 40 protects when the rules are broken

6.1How the Board decides, in one paragraph

The directors can act as the Board in only two ways. They can decide by a majority at a meeting that has a quorum, or in writing if every director who could vote signs. The Charter's definition says the same: the Board is the directors “acting at a quorate meeting or by a written resolution under paragraph 4.6” (§1.1). Anything else is a group of directors talking, however senior they are.

Key point

Three of five directors are a majority of the Board, but they are not the Board. Only a quorate meeting, or a written resolution signed by every eligible director, can decide.

Also in this chapter

  1. Why the overdraft renewal needed the Board
  2. Notice: a week for ordinary business, 48 hours when urgent
  3. Quorum: three directors, one of them independent
  4. A written resolution needs every eligible director
  5. Majority, and no casting vote
  6. How the Board renewed the overdraft three days later
  7. If the bank had relied on the paper
  8. Your job

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