Ireland · Directors and the secretary

Board meetings, written resolutions of directors, minutes and the audit committee

the Companies Act 2014 · sections 158 to 161 and 164 to 167

The board's authority comes from section 158(1), which places the business of the company in the hands of the directors and allows them to exercise all such powers of the company as the Act and the constitution do not reserve to the members. The exposure is that a board which does not meet, or which meets without a record, cannot later show that a decision was taken by the body the section names. Minutes are the only evidence that survives a change of personnel.

The audit committee requirement catches larger private companies that assume it applies only to listed groups. Section 167 requires the company either to establish an audit committee or to explain why it has not. Independence is defined by reference to a look-back: the condition in section 167(4)(b) is not met if the director held, at any time during the 3 years preceding appointment to the committee, the position section 167(5) describes.

Sections 158 to 161 set the management power of the directors, the appointment and remuneration of a managing director, the delegation of powers and the proceedings of the board. A managing director receives such remuneration by way of salary, commission, participation in profits or a combination as the directors determine (section 159(3)). Sections 164 to 166 govern board meetings, written resolutions of directors and the minutes of both.

Section 167 sets the audit committee obligation for a company that meets the qualifying conditions, the composition of the committee, the independence condition and the statement the directors must make where no committee is established. The section is directed at the company and its directors, so the responsibility for meeting it or explaining the position does not pass to the auditor.

Files 23 and 24 of the IE-COMPANY package cover this situation. File 23 works through how the board is convened, what quorum applies, how written resolutions of directors are passed and how minutes are taken, signed and kept. File 24 works through the audit committee: whether the company meets the qualifying conditions, whether a committee exists, who sits on it, how independence was tested against the 3-year look-back and, where no committee exists, what statement the directors made.

This situation is covered by these files from the pack IE-COMPANY

• File 23 · Board meetings, written resolutions of directors and minutes
• File 24 · Audit committees of large private companies

ComplianceSME tracks the Companies Act 2014 and issues update files through the membership, so that you are never working from a superseded version. Membership

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