The impact of COVID-19 left everyone around the World in a pandemonium during the year 2020 and it is continuing to affect human lives to a great extent till now. Simultaneously, corporates were not left behind from distress of COVID-19 hence, were forced to take various actions to revamp their businesses in order to curb the impact of this pandemic. Further, the Government of India has been actively formulating policies, rolling out various regulations, amendments in corporate laws to minimize the impact of COVID-19 in corporate sector. To say that, recent measures pertaining to the board meetings are exemplary for enabling corporates to conduct their businesses smoothly without burdening them with time-bound compliance of holding board meetings.
The Ministry of Corporate Affairs ("MCA") issued a circular on May 3, 2021 wherein in view of the difficulties arising due to resurgence of COVID-19, it allowed the companies extension in holding board meetings by a period of 60 days for first two quarters of financial year 2021-22. Thus, the gap between two consecutive meetings of the board was allowed to be extended to 180 days during the quarters –April to June 2021 and July to September 2021 instead of 120 days as required in the Companies Act, 2013. In addition to this, the MCA recently issued the Companies (Meetings of Board and its Powers) Rules, 2021 ("Rules") on June 15th, 2021 to further ease conduction of board meetings through video-conferencing & other audio-visual means (VC & OAVM). The Rules provide for omission of rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014, by which restriction on conducting board meeting through VC & OAVM means for the below provided agenda items has been done away with:
- the approval of annual financial statements;
- the approval of board's report;
- the approval of the prospectus;
- the Audit Committee Meetings for-consideration of financial statement including consolidated financial statement if any, to be approved by the board under sub-section (1) of section 134 of the Act; and
- the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
As a result of the amended rules, the board is now allowed to transact, discuss and vote on any matters including the matters abovementioned through VC & OAVM as against holding physical board meeting earlier for these matters. Nonetheless, the companies should be vigilant whilst conducting board meetings through VC & OAVM mode so as to safeguard their sensitive information which can effect company's business.
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