Holding Board of Directors Meetings by Conference Phone/Video Screen Communication in the Time of Coronavirus for California Corporations

What do you do when you have an upcoming board of directors meeting on the calendar for your California corporation and your directors are unable to meet in person due to safety concerns related to Coronavirus? Your normal meeting location may be closed due to a governmental order, directors may be worried about the risk of maintaining a safe "social distance" or may be otherwise unavailable and working from home. A California corporation still needs to hold meetings of its board of directors in order to comply with corporate formalities and to receive guidance from its experienced leaders during a difficult and changing business climate. The best solution when an in-person meeting will not work is to simply hold board of directors meetings by conference phone or electronic video screen communication.

HOW TO HOLD BOARD OF DIRECTORS MEETINGS BY CONFERENCE PHONE OR VIDEO SCREEN COMMUNICATION

1. First, check your Articles of Incorporation and your Bylaws
   • California Corporations Code Section 307(a)(6) permits participation in meetings of the board of directors by conference telephone or video screen communication "[u]nless otherwise provided in the articles or . . . in the bylaws."
   • Therefore, the first step is to confirm that your corporation's Articles of Incorporation and Bylaws do not prohibit participating in meetings of the board of directors by phone or video screen communication. The corporation may need to amend one or both of these instruments if meetings by conference telephone or video screen communication are prohibited.
2. All Directors must be able to hear one another when meeting by telephone conference
   • One of the technical requirements of California Corporations Code Section 307(a)(6) is that participation in board meetings by conference phone will constitute presence at the board meeting ". . . as long as all members participating in the meeting are able to hear one another." Therefore, the individual chairing the meeting should confirm this fact at the beginning of the meeting and this confirmation should be reflected in the minutes of the meeting.
3. All Directors must be able to communicate with each other and participate in a meeting conducted by video screen communication
   • Two very specific requirements must be met to hold a valid meeting by video screen communication. All directors must be able to communicate with all other members. Therefore, the individual chairing the meeting should confirm this fact at the beginning of the meeting and this confirmation should be reflected in the minutes of the meeting.
   • Each director must also be provided a means of participating in all matters before the board, including the capacity to propose, or interpose an objection to, a specific action to be taken.
4. Prior notice of the meeting must be provided
   • If the meeting is not a regular meeting of the board, California Corporations Code Section 307(a)(2) provides that prior notice must be given with four days' prior notice by mail or 48 hours' prior notice delivered personally or by telephone, including voicemail. This prior notice should include the conference call dial-in information or instructions for participation by video screen communication. If proper notice was not given or practical under the circumstances, waivers of notice should be obtained and retained with the minutes of the meeting.