How much notice do you need to give to call a directors/Board meeting?

Do directors need notice of proposed director/Board resolutions?

The Corporations Act 2001 (Cth) does not specify a minimum notice period for the calling of a valid directors/Board meeting.

All that is required under the Corporations Act is that each director must be given ‘reasonable notice‘ of the meeting by the director calling the meeting. (See section 248C, which is a Replaceable Rule)

Because the Corporations Act provision requiring reasonable notice is replaceable, your Company’s Constitution may include provisions that specify a minimum notice period for the calling of a valid directors/Board meeting. However, this is not very common, particularly in older constitutions. The reason for this is that directors often want to keep their options open to call a meeting at quite short notice.

What amounts to ‘reasonable‘ notice is a question of fact and degree. The leading case on this question is Toole v. Flexihire. This case decided that the notice period needs to be ‘fair and reasonable’ and this is satisfied if all the directors were practically able to attend and represent their interests, if they wanted to do so. This test therefore comes down to a practical weighting of the circumstances surrounding the calling of the meeting.

With modern technology enabling meetings to be attended remotely (provided the Constitution allows for this), the Courts are more likely to construe this ‘reasonable’ requirement narrowly, and are likely to see this requirement satisfied if the director is made aware of the meeting (i.e. they have received notice:Mitropoulos v. Greek Othodox Church), and from a practical standpoint, are able to attend.

A meeting called at very short notice may not satisfy this requirement, because it is reasonable to expect that directors will have made other appointments that cannot be moved at short notice. If you are not reasonably able to attend a meeting for a genuine reason, you should immediately notify the person calling the meeting of that fact, and state that you believe the notice period to be unfair and unreasonable. This will provide some basis for claiming the meeting was invalid for failure of reasonable notice. Ideally you give this notice as soon as practical after receiving notice of the meeting, and prior to the meeting taking place.

For help with the proper governance of your company, call us on 1300 654 590.

Do directors need notice of proposed director/Board resolutions?

 

The information contained in this post is current at the date of editing – 5 November 2024.

Our Great Lawyer Guarantee

We want to be part of your team over the long term. We'll achieve this by sticking closely to the following principles:

  • We'll listen carefully to understand what you want to achieve. Then we'll thoroughly explain our advice and step you through the documents. You can be sure you'll know the full consequences.
  • Our lawyers work as a team, so someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.
  • One of our key goals is to pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.
  • We only do what we're good at. You can be confident that we know what we're doing and won't pass on the cost of our learning.
  • For advice and documents, we provide a fixed or capped quote so you don’t take price risk. If you're in a dispute, we'll map out the process and costs so you know what to expect.
  • We're not in this game for our egos. We're in it for a front row seat to witness your success.

We measure our success on how efficiently we have facilitated your objectives, enhanced your relationships, and reduced the level of stress for all involved.

If we sound like people you can work with, call us now on 1300 654 590 and speak directly with a great lawyer.