MEETINGS

UNIT-3
 INTRODUCTION

• Companies conduct various meetings to ensure compliance and decision-making

• Types: AGM, EGM, Board Meetings
 ANNUAL GENERAL MEETING (AGM)

• Mandatory for every company except One Person Company (OPC)

• Held every calendar year
• First AGM: Within 9 months from the end of the first financial year
• Subsequent AGMs: Within 6 months from the end of the financial year (not exceeding 15
months from the last AGM)
 BUSINESS TRANSACTED AT AGM

• Ordinary Business:
• Approval of financial statements
• Declaration of dividend
• Appointment/reappointment of directors
• Appointment and remuneration of auditors

• Special Business:
• Any business not categorized as ordinary
EXTRAORDINARY GENERAL MEETING (EGM)

• Called for urgent matters that cannot wait until the next AGM
• Can be called by:
• Board of Directors
• Requisition by members (holding at least 10% of voting power)
• National Company Law Tribunal (NCLT)
 NOTICE OF MEETING

• Minimum 21 days notice for general meetings (can be longer as per Articles of
Association)
• Mode of Notice:
• Physical (post or courier)
• Electronic (email)
• Publication (newspaper, if required)
 QUORUM FOR GENERAL MEETINGS

• Minimum attendance required for a valid meeting

• For public companies:
• Up to 1000 members: 5 members
• 1001-5000 members: 15 members
• More than 5000 members: 30 members

• For private companies:

• 2 members personally present
 CHAIRMAN OF MEETING

• Presides over the meeting and ensures orderly conduct

• Appointment:
• As per Articles of Association
• Elected by members if no pre-designated chairman

• Has a casting vote in case of a tie

 PROXIES

• Members can appoint a proxy to vote on their behalf

• Proxy must be submitted at least 48 hours before the meeting
• A person can act as a proxy for up to 50 members (or members holding up to 10% of
voting rights)
 VOTING METHODS

• Show of Hands: 1 member = 1 vote (no proxies counted)

• Electronic Voting: Mandatory for listed companies and companies with 1000+
members
• Poll: 1 share = 1 vote, demanded by members holding at least 10% of voting rights
• Postal Ballot: Used for specific resolutions (e.g., alteration of Memorandum of
Association)
 RESOLUTIONS

• Ordinary Resolution: Passed by a simple majority (more than 50% of votes)

• Special Resolution: Passed by a 3/4 majority (at least 75% of votes)
• Resolutions Requiring Special Notice: Requires prior 14 days notice to the
company
 BOARD MEETINGS

• First Board Meeting: Within 30 days of incorporation

• Minimum 4 Board Meetings per year, not exceeding 120 days gap between meetings
• For small companies/OPC: At least 2 meetings per year
 CONDUCT OF BOARD MEETINGS

• Notice: At least 7 days before the meeting

• Quorum: Minimum 1/3rd of total directors (minimum 2 directors required)
• Agenda: Predefined topics, no unlisted business allowed
 E-VOTING & REMOTE VOTING

• Introduced for greater transparency

• Available for:
• Listed companies
• Companies with 1000+ members

• Process:
• Voting opens for at least 3 days before the meeting
• Votes remain secret until the meeting concludes
 MINUTES OF MEETING

• Record of proceedings must be maintained

• Entered within 30 days in a minute book
• Signed by the Chairman
 CONCLUSION

• Meetings ensure corporate governance and transparency

• Compliance with laws is essential for smooth operations
• Proper documentation and adherence to timelines are crucial
 INTRODUCTION TO BOARD COMMITTEES

• Board committees are sub-groups within the Board of Directors that handle specialized
tasks.
• They enhance efficiency, governance, and decision-making.
• Committees ensure compliance with legal and regulatory requirements.
• They allow directors to use their expertise effectively and focus on critical business
areas.
 WHY ARE BOARD COMMITTEES NECESSARY?

• Governance & Oversight: Helps in better management of financial and operational

risks.
• Regulatory Compliance: Ensures adherence to Companies Act, SEBI regulations, and
corporate laws.
• Transparency & Accountability: Enhances investor confidence through structured
decision-making.
• Specialized Focus: Divides responsibilities for efficient board functioning.
 MANDATORY BOARD COMMITTEES UNDER
COMPANIES ACT, 2013
• Companies meeting specific financial criteria must establish these committees:
• Audit Committee – Supervises financial reporting and internal controls.
• Nomination & Remuneration Committee – Manages director appointments & pay
structures.
• Stakeholders Relationship Committee – Resolves shareholder grievances.
• Corporate Social Responsibility (CSR) Committee – Ensures CSR compliance
and implementation.
 AUDIT COMMITTEE

• Key Functions:
• Reviews financial statements to ensure transparency.
• Oversees risk management & fraud prevention.
• Monitors compliance with audit and financial regulations.
• Composition: Minimum of 3 directors, majority independent.
• Meetings: Must meet at least 4 times a year
 NOMINATION & REMUNERATION COMMITTEE

• Key Functions:
• Recommends appointments of directors and senior executives.
• Conducts performance evaluations for board members.
• Designs fair and competitive compensation structures.
• Composition: At least 3 non-executive directors, half being independent.
• Meetings: Held periodically to discuss appointments and compensation.
 STAKEHOLDERS RELATIONSHIP COMMITTEE

• Key Functions:
• Resolves investor grievances regarding dividends, transfers, and disclosures.
• Ensures compliance with SEBI guidelines and other regulations.
• Facilitates better communication between the company and stakeholders.
• Composition: Chaired by a non-executive director.
• Meetings: Scheduled as per the need to address investor concerns.
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
COMMITTEE
• Key Functions:
• Formulates CSR policies and implementation plans.
• Allocates funds ensuring at least 2% of average net profits are spent on CSR.
• Ensures CSR initiatives align with government-approved themes.
• Composition: Minimum of 3 directors, including one independent director.
• Meetings: Conducts periodic reviews of CSR programs.
 ENHANCING COMMITTEE EFFECTIVENESS

• Define Clear Roles & Responsibilities – Establish well-documented Terms of

Reference.
• Hold Regular Meetings – Ensure periodic reviews and timely decision-making.
• Conduct Performance Evaluations – Assess impact and improve governance.
• Engage Independent Experts – Seek external guidance for unbiased decision-making.
• Ensure Transparency & Reporting – Maintain clear disclosures to stakeholders.
 CASE STUDY

• Board Committees in Action – Infosys Ltd.

• Company Overview
• Infosys Ltd. is a leading IT services company in India, known for strong corporate
governance. The company has established board committees to ensure compliance with
the Companies Act, 2013, and enhance decision-making processes.
 SCENARIO

• In 2017, Infosys faced a corporate governance crisis when its founder Narayana Murthy
questioned the board’s decisions regarding executive compensation, CEO succession, and
acquisitions. This situation required a strong role from board committees to address
transparency and governance concerns.
 ROLE OF DIFFERENT BOARD COMMITTEES IN
ADDRESSING THE CRISIS
• Audit Committee – Strengthening Financial Transparency
• ✅ Issue: Concerns about high CEO compensation and a lack of financial disclosures in
acquisitions.
• ✅ Audit Committee’s Action:
• Conducted an internal audit of financial transactions.
• Reviewed the remuneration details of key executives.
• Ensured compliance with SEBI and Companies Act regulations.
• ✅ Outcome: Greater transparency in financial reporting and disclosures.
 ROLE OF DIFFERENT BOARD COMMITTEES IN
ADDRESSING THE CRISIS
• Nomination & Remuneration Committee – CEO Succession Planning
• ✅ Issue: CEO Vishal Sikka resigned due to governance concerns.
• ✅ Committee’s Action:
• Evaluated internal and external candidates for the CEO role.
• Assessed executive compensation structures to ensure fairness.
• Recommended Salil Parekh as the new CEO based on leadership and governance expertise.
• ✅ Outcome: A structured and smooth transition of leadership.
 ROLE OF DIFFERENT BOARD COMMITTEES IN
ADDRESSING THE CRISIS
• Stakeholders Relationship Committee – Restoring Investor Confidence
• ✅ Issue: Investors lost trust due to governance issues and declining stock prices.
• ✅ Committee’s Action:
• Conducted shareholder meetings to address concerns.
• Issued clear communication on governance improvements.
• Ensured compliance with SEBI’s corporate governance regulations.
• ✅ Outcome: Improved investor relations and increased shareholder confidence.
 ROLE OF DIFFERENT BOARD COMMITTEES IN
ADDRESSING THE CRISIS
• CSR Committee – Managing Social Responsibility During Crisis
• ✅ Issue: Reputation damage due to governance issues.
• ✅ Committee’s Action:
• Increased focus on social initiatives to maintain Infosys' positive image.
• Strengthened CSR funding in education and sustainability projects.
• ✅ Outcome: Maintained brand reputation despite internal challenges.
 FINAL RESULTS & LESSONS LEARNED

• The Audit Committee ensured financial integrity and reduced concerns about misuse of funds.
• 🔹 The Nomination & Remuneration Committee facilitated a smooth leadership transition to
restore stability.
• 🔹 The Stakeholders Relationship Committee engaged investors, preventing a massive stock
sell-off.
• 🔹 The CSR Committee helped sustain the company’s goodwill during the crisis.
• 📌 Key Takeaway:
• 👉 Infosys successfully managed a governance crisis by relying on strong board committees to
handle transparency, financial, and leadership concerns.
 GRIEVANCE REDRESSAL UNDER THE COMPANIES
ACT, 2013
• Grievance Redressal refers to the process through which stakeholders (such as
shareholders, investors, employees, creditors, and regulatory bodies) can raise complaints
related to a company's operations, governance, and compliance. The Act provides multiple
mechanisms to address, investigate, and resolve grievances in a structured manner.
 KEY FEATURES OF GRIEVANCE REDRESSAL

• Legal Framework: The Act provides statutory provisions for handling complaints related to
company law violations, oppression & mismanagement, fraud, and non-compliance.
• Regulatory Authorities:Various bodies such as the Registrar of Companies (ROC), National
Company Law Tribunal (NCLT), National Company Law Appellate Tribunal (NCLAT),
Serious Fraud Investigation Office (SFIO), and Investor Education and Protection
Fund (IEPF) handle different types of grievances.
• Online Complaint Mechanisms: The MCA21 Portal, SEBI SCORES, and IEPF Portal allow
stakeholders to file complaints electronically.
• Appeal Process: If a complainant is not satisfied with the resolution, they can appeal to a higher
authority (e.g., NCLAT, High Court, or Supreme Court).
 TYPES OF GRIEVANCES COVERED UNDER THE
COMPANIES ACT, 2013
Grievance Type Applicable Authority/Process
Non-receipt of dividends, shares, or refund of IEPF Authority, SEBI SCORES
application money
Corporate fraud, misrepresentation, or financial
SFIO, NCLT, Special Courts
misconduct
Oppression & mismanagement by company NCLT (Section 241-242)
directors
Violation of company law provisions (e.g., failure Registrar of Companies (ROC)
to file annual returns, non-compliance with
regulations)
Insolvency & bankruptcy issues NCLT under IBC, 2016
Issues related to shareholder rights in listed SEBI SCORES Portal
companies