I. What is a meeting of the Board of Directors?
Vietnamese law does not explicitly define a meeting of the Board of Directors. However, based on Articles 153 and 157 of the Law on Enterprise 2020, it can be understood as a meeting of members of the Board of Directors concerning matters related to the management and operation of the company.
II. What decisions are made and approved during important meetings of the Board of Directors?
The meeting of the Board of Directors makes important decisions such as:
- Determining the company’s strategic direction, medium-term development plans, and annual business plans;
- Deciding on the sale of unsold stocks within the authorized offering limit for each type of stocks; and determining other capital mobilization methods;
- Deciding on the selling prices of the company’s stocks and bonds;
- Deciding on the repurchase of stocks under Clauses 1 and 2, Article 133 of the Law on Enterprise 2020;
- Approving investment plans and projects within the competence and limits prescribed by law;
- Making decisions on market development, marketing strategies, and technology solutions;
- Approving contracts for purchase, sale, borrowing, lending, and other transactions with a value equal to or more than 35% of the total assets recorded in the most recent financial statements, as prescribed in Article 153 of the Law on Enterprise 2020;
- Appointing and dismissing senior executives;
- Deciding on the organizational structure, internal governance regulations, the establishment of subsidiaries, branches and representative offices, and the capital contribution or stock purchase in other enterprises;
- Other decisions as provided by law and the company’s charter.
III. Under what circumstances is the Board of Directors convened?
According to Clause 2, Article 157 of the Law on Enterprise 2020, the Board of Directors must meet at least once every quarter and may convene extraordinary meetings. The Chairman of the Board of Directors shall convene a meeting under the following circumstances:
- Upon request by the Supervisory Board or an independent member of the Board of Directors;
- Upon request by the General Director or Director or at least five other managers;
- Upon request by at least two members of the Board of Directors;
- Other circumstances as stipulated in the company’s charter.
Accordingly, the meeting of the Board of Directors can be held periodically (at least once per quarter) or extraordinarily, depending on the statutory or charter-based conditions.
IV. Procedures and processes of the meeting of the Board of Directors
Under Article 157 of the Law on Enterprise 2020, the procedures are as follows:
- The Chairman or the convener must send a notice of meeting at least 3 working days prior to the meeting date, unless otherwise stipulated by the company charter.
- Supervisors are entitled to attend meetings of the Board of Directors; they may participate in discussions but are not entitled to vote.
- The meeting is valid when at least three-quarters of the total members are present.
- If the first meeting does not meet the quorum requirements, a second meeting may be convened within 7 days from the intended date of the first meeting, unless the company charter provides for a shorter period. In such a case, the meeting shall be valid if more than half of the members are present.
- Members must fully attend meetings of the Board of Directors. A member may authorize another person to attend and vote, subject to approval by the majority of other members.
- Unless otherwise specified by the charter with a higher voting ratio, resolutions and decisions of the Board of Directors are passed with a majority of votes from attending members; in case of equal votes, the Chairman’s vote shall be decisive.
V. Contents of the meeting minutes
According to Article 158 of the Law on Enterprise 2020, the minutes of the meeting of the Board of Directors must include the following details:
- Name, address of the head office, and enterprise code;
- Time and venue of the meeting;
- Purpose, program, and contents of the meeting;
- Full name of each attendee or authorized representative, and methods of attendance; full name of absent members and reasons for absence;
- Issues discussed and voted on during the meeting;
- Summary of each member’s opinions in the order they were expressed during the meeting;
- Voting results, specifying members who approved, disapproved, or abstained;
- Matters passed and the corresponding approval ratios;
- Full name and signature of the chairperson and a person taking the minutes, except in the case provided in Clause 2 of this Article.
VI. Legal consequences when the meeting minutes take effect as prescribed in Clause 2, Article 158 of the Law on Enterprise 2020
Under Clause 2, Article 158 of the Law on Enterprise 2020, if the chairperson or a person taking the minutes refuses to sign the meeting minutes, the minutes will still be valid provided that all other attending members of the Board of Directors sign and the minutes contain all required contents under Points a, b, c, d, đ, e, g, and h, Clause 1 of this Article.
However, provision was amended by Clause 6, Article 7 of the Law amending the Law on Public Investment, the Law on Public-Private Partnership Investment, the Law on Investment, the Law on Housing, the Law on Procurement, the Law on Electricity, the Law on Enterprises, the Law on Special Consumption Tax, and the Law on Enforcement of Civil Judgments 2022, effective from March 1, 2022. Accordingly, Clause 6, Article 7 supplements the following legal consequence:
- The meeting minutes must clearly state that the chairperson and a person taking the minutes refused to sign. Those who sign the minutes shall take joint responsibility for the accuracy and truthfulness of the contents of the meeting minutes. The chairperson and the minute taker shall bear personal liability for any damages caused to the enterprise due to their refusal to sign the meeting minutes in accordance with this Law, the company charter, and relevant laws.
Through this article, NPLaw aims to provide readers with essential information regarding meetings of the Board of Directors, including: definition, decisions passed during the meeting, conditions for convening the meeting, and meeting minutes. If you have any further questions or need legal advice, please contact NPLaw for consultation and support.
