INDIAN PRACTICE – Board/Committee Meetings of an Indian Company through Video-conferencing
By a Circular dated May 20, 2011, the Ministry of Corporate Affairs (MCA) has clarified that participation by Directors in meetings of the Board or Committee of Directors through electronic mode will be recognized. Hitherto only physical meetings were recognized as meetings for purposes of the (Indian) Companies Act, 1956. The said Act provides for passing of resolutions by circulation and for appointment of alternate Directors, which provided alternatives. However, it was a long-standing industry demand to recognize meetings through electronic mode. Under the Circular, there are certain conditions subject to participation through electronic means will be recognized. Simultaneously, the MCA has issued another Circular recognizing participation by shareholders in meetings through electronic mode. The Circulars are a step in the right direction. Going along the MCA will have to address the issues that crop up before there is complete clarity on attending meetings through video-conferencing.