6. The role of the board

Question 1

In whom is managerial power vested?

Answer 1

In members, but they delegate managerial to the directors

Question 2

What does the article 3 of Model Articles state?

Answer 2

MA:
Subject to the Articles, the directors are responsible for the management of the company business, for which purposes they may exercise all the powers of the company

Question 3

To what extent the members can interfere in management?

Answer 3

Members cannot interfere in management unless the articles so provide.
MA art 4 provide: members may, by special resolution, direct the directors to take, or refrain from taking, specified action.

Question 4

Can the directors delegate managerial powers?

Answer 4

Only possible if the articles allow for it.
MA art 5 provide: subject to articles, the directors may delegate any of the powers which are conferred on them under the articles:
by such committee,
by such means
by such an extent
in relation to such matters or territories
on such terms and conditions as they think fit.

Question 5

Who has the power to call the board meeting?

Answer 5

Articles provide who can call, MA provide that any director may call a meeting by giving notice

Question 6

Quorum?

Answer 6

Quorum is a matter for the articles. If articles are silent, than MA stipulate that quorum should be no less than 2.

Question 7

How are board decisions are taken in private and public companies?

Answer 7

MA 7 (private co):
- majority decision at the meeting
- decision taken in accordance with Art 8 (directors share common view on the matter)
MA 13 (plc):
- subject to articles, a decision is taken at the meeting by majority of the votes of participating directors, each director has ONE vote.
- Decisions may also be taken without a meeting by written resolution.

Question 8

For how long must a company keep records of board meetings?

Answer 8

s. 248 (1) - all meetings minuted

s. 248 (2) - kept for 10 years

Question 9

Is company required to have cosec?

Answer 9

Private - no s.271 (1) unless specified by articles

PLC - yes s. 271

Question 10

What is the role of a cosec?

Answer 10

The role of cosec is not set out in law, but mainly chief administrative officer of the company:

• ensure filing up to date
• agenda
• meetings conducted in accordance with the law
• maintain registers
• advising on annual accounts preparation
• compliance with requirements

Question 11

What authority does a cosec have as an agent?

Answer 11

An agent may be given express authority to engage in certain acts and also have apparent binding authority to bind the company in relation to admin matters.