By Piyawannee Watanasakolpunt and Sudthapa Thanathanya
The Public Limited Company Act of 1992 requires that a board of directors meeting of a public limited company may only be summoned by a chairman of the board. In practice, this requirement has proven to be problematic, with public companies facing disruptions of their business when a board of directors meeting is required but the chairman is absent.
The Department of Business Development (DBD) has tried to address this issue via its official explanation on 17 May 2018 following a ruling of the State Council:
- If the number of directors meets the legal requirements for a quorum in the absence of the chairman, such directors can summon a board meeting.
- If the number of directors is less than the legal requirements for a quorum as a result of director vacancies (and whether or not the chairman is absent), such directors can act in the name of the board of directors in order to call a shareholders’ meeting to appoint new directors to fill any director vacancies within one month.
- The company can also include its own terms and conditions in its articles of association for summoning a board meeting in the absence of the chairman.