Virtual Meeting

1. Defining the Virtual Meeting in a Corporate Context

A virtual meeting is a real-time interaction that takes place over the internet using integrated audio and video, chat tools, and application sharing. In the context of corporate governance, a virtual meeting (often called an online meeting or electronic meeting) allows directors, shareholders, and committee members to convene, deliberate, and make binding decisions without being physically present in the same location.

Unlike a simple telephone conference call, a modern virtual board meeting leverages sophisticated technology, often through a dedicated board management platform like BoardCloud. These platforms provide a secure, controlled environment that aims to replicate—and in many ways, enhance—the structure and formalities of a traditional in-person board meeting. Key features include high-definition video, secure distribution of the digital Board Pack, integrated voting and polling mechanisms, and tools for drafting and circulating Minutes.

The adoption of virtual meetings has accelerated dramatically, driven by globalisation, the need for business continuity, cost efficiencies, and a fundamental shift in working practices. For UK boards, this shift has raised important questions regarding legality, security, and effectiveness, all of which are governed by company law and an organisation's own constitutional documents.

2. The Legal Framework for Virtual Meetings in the UK

The legitimacy of a virtual board or shareholder meeting in the United Kingdom is not determined by a single piece of legislation but by an interplay between the Companies Act 2006 and, most importantly, a company's own Articles of Association.

The Companies Act 2006

The Companies Act 2006 provides the foundational legal framework for UK companies. It does not explicitly prohibit virtual meetings. The prevailing interpretation is that the Act is permissive, allowing for meetings to be held electronically provided that all participants can communicate and engage with one another. The key concept is that of being 'present'. The legislation is generally understood to allow for presence via technological means, as long as each director can hear and be heard by all others.

However, the Act is not prescriptive. It grants companies significant autonomy to define their own meeting procedures within their articles. This is where the critical details lie.

The Primacy of the Articles of Association

A company's Articles of Association are its internal rulebook, defining the rights and responsibilities of directors and shareholders, and the procedures for decision-making. This is the single most important document for determining the validity of a virtual meeting.

• Explicit Permission: Modern articles often contain clauses that explicitly permit meetings to be held electronically. They may specify the technologies that can be used and the procedures for verifying attendance, quorum, and voting.

• Restrictive Wording: Older articles, drafted before the widespread adoption of digital technology, may contain restrictive language. Phrasing such as "meetings shall be held at..." a specific place, or requirements for directors to be "physically present," can be interpreted as prohibiting fully virtual meetings.

• Ambiguity: Some articles are silent on the matter. In these cases, legal interpretation is required. The general trend is to permit virtual meetings if not expressly forbidden, but relying on this ambiguity carries risk.

Crucial Note: Before convening a fully virtual board or general meeting, a company secretary or legal counsel must review the company's Articles of Association. If the articles are restrictive or ambiguous, it is highly advisable to amend them via a special resolution to explicitly allow for virtual and Hybrid Meetings.

The Corporate Insolvency and Governance Act 2020 (CIGA)

During the COVID-19 pandemic, the UK Government passed CIGA 2020, which introduced temporary measures to provide companies with greater flexibility. This Act allowed companies to hold virtual-only meetings regardless of what their articles said. However, these temporary provisions expired on 30th March 2021. Companies can no longer rely on CIGA and must ensure their meeting formats are compliant with their current Articles of Association.

Quorum and Voting in a Virtual Setting

• Establishing Quorum: A quorum (the minimum number of members required to be present for a meeting to be valid) can be established in a virtual meeting. The Chair must be able to confirm that the requisite number of directors are present and engaged throughout the meeting. A reliable meeting platform should provide a clear participant list. It is good practice for the Chair to conduct a roll call at the start and to confirm quorum is maintained, especially before a vote.

• Voting: Votes taken in a validly constituted virtual meeting are as legally binding as those taken in person. Votes can be conducted by a show of virtual 'hands', by verbal assent recorded in the minutes, or through formal polling and e-voting features within a secure board portal. These digital tools provide an accurate and auditable record of voting outcomes.

3. Best Practices for Conducting Effective Virtual Board Meetings

An effective virtual meeting requires more disciplined preparation and execution than its in-person counterpart. The goal is to ensure robust Corporate Governance, full participation, and efficient decision-making.

Phase 1: Pre-Meeting Preparation

• Technology First: Ensure the chosen platform is secure, reliable, and familiar to all participants. Conduct a brief, mandatory tech check-in with any directors who are new to the platform a few days before the meeting.

• Strategic Agenda Design: A virtual meeting agenda should be more focused. Allocate clear time slots for each item and consider scheduling short breaks (5-10 minutes) for longer meetings to combat screen fatigue. The agenda should be circulated well in advance using an Agenda Management tool.

• Timely Board Pack Distribution: The digital board pack must be distributed at least one week in advance through a secure portal. This gives directors ample time to read, digest, and prepare questions on the materials, which is crucial for an efficient meeting.

• Set Clear Etiquette: Circulate a short protocol guide with the agenda. This should cover expectations for muting microphones when not speaking, using the 'raise hand' feature to ask questions, conventions for camera use (cameras on is generally preferred to maintain engagement), and how voting will be conducted.

Phase 2: During the Meeting Execution

• The Role of the Chair: The Chair's role is even more critical in a virtual setting. They must be a firm but inclusive facilitator, actively inviting contributions from quieter members, preventing individuals from dominating the discussion, and keeping the meeting to time.

• Start with a Roll Call: The Chair or Company Secretary should begin by formally noting the attendees and confirming that a quorum is present.

• Manage Participation: Use the platform's features to manage the flow of conversation. The 'raise hand' function is invaluable for creating an orderly queue for questions and comments, ensuring everyone has a chance to speak.

• Clarity in Motions and Voting: When a motion is put to a vote, the Chair must state it clearly and precisely. The voting method (e.g., verbal assent, poll) should be announced, and the results must be clearly declared and recorded.

• Minute Taking: The minute-taker must be diligent in capturing the essence of discussions and the precise wording of resolutions. Secure board portals often include features to assist with minute-taking, linking decisions directly to agenda items.

Phase 3: Post-Meeting Actions

• Prompt Distribution of Minutes: Draft minutes should be circulated for review as soon as possible after the meeting while the discussions are still fresh in everyone's minds.

• Action Item Management: All assigned tasks and resolutions must be captured and tracked. An effective Action Item Tracking system ensures that decisions made in the meeting translate into tangible outcomes.

• Gather Feedback: Consider soliciting feedback from directors on the effectiveness of the virtual format to continuously improve the process.

4. Advantages and Challenges of Virtual Meetings

Advantages

• Cost and Time Efficiency: Eliminates travel time and expenses (flights, hotels, transport), resulting in significant cost savings and freeing up valuable executive time.

• Increased Accessibility and Flexibility: Allows directors from diverse geographical locations to participate fully, widening the talent pool for board appointments. It also makes it easier to schedule urgent meetings at short notice.

• Enhanced Governance and Record-Keeping: Modern board portals provide a clear, auditable trail of meeting invitations, document versions, votes, and action items, strengthening the governance framework.

• Environmental Benefits: Reduces the carbon footprint associated with travel to in-person meetings.

Challenges and Mitigations

5. Conclusion: A Permanent Fixture of Modern Governance

The virtual meeting is no longer a temporary solution but a permanent and integral component of modern corporate governance in the UK and globally. When supported by robust technology, clear procedures, and skilled chairing, virtual meetings offer a powerful, efficient, and secure alternative to traditional gatherings. For UK companies, the key to unlocking these benefits lies in ensuring their Articles of Association provide a clear mandate for electronic meetings and adopting best practices that uphold the highest standards of governance and decision-making.

Frequently Asked Questions (FAQ)

Q1: Are virtual-only board meetings legal for UK companies?

A: Yes, they can be, but it is entirely dependent on the company's Articles of Association. The Companies Act 2006 is generally permissive, but if a company's articles contain language that requires physical presence at a specific location, a virtual-only meeting may be invalid. It is essential to review and, if necessary, amend your company's articles to explicitly permit virtual meetings. The temporary permissions granted under the Corporate Insolvency and Governance Act 2020 (CIGA) have expired.

Q2: How can we ensure the security of a confidential virtual board meeting?

A: Security is paramount. You should avoid using standard, consumer-grade video conferencing software. Instead, use a dedicated board management platform, such as BoardCloud, which offers features like:

• End-to-end encryption for all data streams.

• Secure, role-based access controls to the meeting and associated documents.

• A secure digital repository for the board pack, preventing the need to send sensitive documents over email.

• Watermarking of documents and other features to prevent unauthorised sharing.

Q3: What is the difference between a virtual meeting and a hybrid meeting?

A: A virtual meeting is fully remote, where all participants join from separate locations via a digital platform. No one is physically present in a meeting room. A hybrid meeting is a blend of the two formats, where a core group of participants convenes in a physical location (e.g., the boardroom) while others join remotely via video conference. Hybrid meetings offer flexibility but require more complex technological setups to ensure the experience is equitable for both remote and in-person attendees.