The Board of Directors is a main management body in the joint stock company, responsible for deciding strategic matters and the company’s operational orientation. Convening meetings of the Board of Directors is not merely an administrative procedure, but also a mechanism to ensure transparency, effectiveness, and legal compliance in corporate governance.

I. The need to convene meetings of the board of directors

Convening meetings of the Board of Directors is necessary for its members to discuss and make decisions on important matters of the company, such as business plans, investment activities, profit distribution, and other issues as prescribed by law.

In particular, in urgent situations or in cases of internal disagreements, holding meetings of the Board of Directors helps ensure consistency and legality in the decision-making process.

II. Legal regulations on convening meetings of the board of directors

1. What is the convening of a board of directors meeting?

The convening of a Board of Directors meeting is the process of notifying, organizing, and conducting a meeting of the members of the Board of Directors for the purpose of discussing and deciding matters within the authority of the Board of Directors. It is an important activity in the governance of the joint stock company, ensuring transparency, consistency, and effectiveness in company management. The convening of Board of Directors meetings must comply with legal regulations and the company’s charter.

2. Who has the authority to convene meetings of the board of directors?

Clause 1 Article 157 of the Law on Enterprise 2020 provides: The Chairperson of the Board of Directors shall be elected at the first meeting of the Board of Directors within 07 working days from the date of completion of the election of such Board of Directors. Such a meeting shall be convened and chaired by the member receiving the highest number or the highest percentage of votes. Accordingly, for the first meeting of the Board of Directors, the member receiving the highest number or the highest percentage of votes has the authority to convene and preside over the meeting.

After the Chairperson of the Board of Directors has been elected, the Chairperson shall convene meetings of the Board of Directors upon request in accordance with Clause 3 Article 157, including the following cases:

  • Upon request of the Supervisory Board or an independent member of the Board of Directors;
  • Upon request of the Director or General Director, or at least five (05) other managers;
  • Upon request of at least two (02) members of the Board of Directors;
  • Other cases as stipulated in the company’s charter.

If the Chairperson of the Board of Directors fails to convene a meeting within the prescribed duration following a valid request, the requesting party has the right to replace the Chairperson in convening the Board of Directors meeting in accordance with Clause 5 Article 157.

Accordingly, depending on the specific case, the persons entitled to convene meetings of the Board of Directors include: The member receiving the highest number or the highest percentage of votes (for the first meeting); the Chairperson of the Board of Directors; the Supervisory Board or an independent member of the Board of Directors; the Director or General Director or at least five other managers; at least two members of the Board of Directors; or other persons as stipulated in the company’s charter.

3. How often must the Board of Directors be convened?

Clause 2 Article 157 of the Law on Enterprise 2020 provides: The Board of Directors shall meet at least once every quarter and may hold extraordinary meetings.

Accordingly, the Board of Directors must be convened to meet at least once every quarter and may also hold extraordinary meetings when necessary.

III. Certain questions regarding the convening of Board of Directors meetings

1. Cases in which the chairperson of the Board of Directors must convene a board meeting

Pursuant to Clause 3 Article 157 of the Law on Enterprises 2020, the Chairperson of the Board of Directors must convene a meeting of the Board of Directors in the following cases:

  • Upon request of the Supervisory Board or an independent member of the Board of Directors;
  • Upon request of the Director or General Director, or at least five (05) other managers;
  • Upon request of at least two (02) members of the Board of Directors;
  • Other cases as stipulated in the company’s charter.

Accordingly, in the above-mentioned cases, the Chairperson of the Board of Directors is obliged to convene a Board of Directors meeting.

2. Procedures for convening meetings of the Board of Directors

  • Step 1: The Chairperson of the Board of Directors must convene a Board of Directors meeting within 07 working days from the date of receipt of a request as prescribed in Clause 3 Article 157 of the Law on Enterprise 2020.
  • Step 2: The Chairperson of the Board of Directors or the person convening the meeting must send the meeting invitation and enclosed documents to the Controllers in the same manner as for members of the Board of Directors, in accordance with regulations.
  • Step 3: The Board of Directors meeting shall be conducted when at least three-quarters of the total number of members are present.

3. When is the convening of the Board of Directors meeting considered invalid?

Under the Law on Enterprise 2020, the convening of Board of Directors meetings is permitted only in certain circumstances and must comply with statutory procedures. The meeting must satisfy requirements regarding notice period, meeting notification, number of participants, agenda, and other relevant matters.

Accordingly, if the convening of the Board of Directors meeting fails to comply with the provisions of the Law on Enterprise 2020, it shall be deemed invalid.

4. May a person authorized by a member of the Board of Directors attend and vote at a board meeting?

Clause 11 Article 157 of the Law on Enterprise 2020 provides: Members must fully attend meetings of the Board of Directors. A member may authorize another person to attend and vote at a meeting if such authorization is approved by a majority of the members of the Board of Directors.

Accordingly, a person authorized by a member of the Board of Directors may attend and vote at a Board meeting if such authorization is approved by a majority of the Board of Directors members.

5. Are minutes required for meetings of the board of directors in a joint stock company?

Clause 1 Article 158 of the Law on Enterprise 2020 provides regarding minutes of Board of Directors meetings: Meetings of the Board of Directors must be recorded in minutes and may be audio-recorded, recorded, and stored in other electronic forms. 

Accordingly, meetings of the Board of Directors in the joint stock company must be recorded in minutes.

6. In what cases does the supervisory board of the joint stock company have the right to convene the Board of Directors meeting?

Point a Clause 3 Article 157 of the Law on Enterprise 2020 stipulates that the Chairperson of the Board of Directors must convene the meeting of the Board of Directors upon request of the Supervisory Board.

However, according to Clause 5 Article 157 of the Law on Enterprise 2020: The Chairperson of the Board of Directors must convene of the Board of Directors meeting within 07 working days from the date of receipt of a request specified in Clause 3 of this Article. If the Chairperson fails to convene the meeting as requested, the Chairperson shall be liable for any damage incurred by the company; the requesting party has the right to replace the Chairperson in convening the Board of Directors meeting. 

Accordingly, the Supervisory Board of the joint stock company has the right to convene a Board of Directors meeting if it has made a request but the Chairperson of the Board of Directors fails to convene the meeting within the prescribed time limit.

IV. Legal consulting services on convening meetings of the Board of Directors

The above is NPLaw’s article on the current regulations governing the convening of meetings of the Board of Directors. With a team of experienced lawyers and legal consultants, NPLaw provides reputable and professional legal services, ensuring the best protection of our valued clients’ lawful rights and interests. Should you require legal assistance, please contact NPLaw for consultation and support.