In today’s corporate landscape, considering the dynamics and potential conflicts between the board of directors (“Board”) of a company and investors, it becomes crucial to be certain and have a clear understanding of the legal rights given to the directors. In furtherance of the same, we have discussed the rights granted to directors of a company to convene a Board meeting and whether any director of the company can convene a Board meeting at his/her sole discretion without any further consultation or approval.
A Board meeting needs to be convened in accordance with the Companies Act, 2013 (“Act”) and the secretarial standards prescribed thereunder. However, we believe the legal provisions are slightly ambiguous and provide a scope for subjective interpretation and lack absolute certainty. Due to such ambiguity, there have been cases of disputes between the chairman of a Board and the other Board members relating to whether the other directors can convene a Board meeting without consulting with the chairman or whether it is mandatory to get chairman’s approval to convene a meeting.
Due to the increased frequency of such conflicts and uncertainty on the power of directors to convene a Board meeting under the relevant legal provisions and secretarial standards, we have discussed this issue in detail in this Article.
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