On 17 May 2018, the Department of Business Development ("DBD"), the Ministry of Commerce, published two clarifications on board of directors meetings for public limited companies after consultation with the Office of the Council of State:

  1. the DBD clarification re: convening a board of directors meeting of a public limited company if there is no chairperson or the chairperson is unable to perform his or her duties, per section 81 of the Public Limited Companies Act, B.E. 2535 (1992) (the "Clarification on Convening a Board of Directors Meeting"); and
  2. the DBD clarification re: holding a board of directors meeting of a public limited company if there are vacancies on the board to the extent that a quorum cannot be formed per section 83 of the Public Limited Companies Act, B.E. 2535 (1992) (the "Clarification on Holding a Board of Directors Meeting").

 

1.     Clarification on Convening a Board of Directors Meeting

The Public Limited Companies Act, B.E. 2535 (1992), as amended (the "PLCA"), states that the chairperson of the board of directors of a public limited company is the person who convenes the board of directors meeting. The ability to convene a board of directors meeting if there is no chairperson or the chairperson is unable to perform his or her duties has long been an issue for public limited companies, including publicly listed companies. This has led to further lack of clarity as to whether the chairperson could name a person in advance to convene a board of directors meeting, or whether the company can prescribe the person who may convene a board of directors meeting if there is no chairperson, or the chairperson is unable to perform his or her duties, in its articles of association. The Clarification on Convening a Board of Directors Meeting now addresses these issues, as summarized below.

1.1    If there is no chairperson, or if the chairperson is unable or refuses to perform his or her duties, and the remaining directors can form a quorum, these directors can hold a board of directors meeting on their own in order to manage the company's affairs.

1.2    The company may provide the specific rules for convening a board of directors meeting if there is no chairperson or the chairperson is unable or refuses to perform his or her duties in its articles of association, so as to ensure the uninterrupted operation of its business.

2.     Clarification on Holding a Board of Directors Meeting

Under section 83 of the PLCA, if there are any vacancies on the board of directors to the extent that a quorum cannot be formed, the remaining directors are only permitted to perform acts in the name of the board of directors regarding the holding of a shareholders meeting to elect directors to fill all of the vacancies. However, it is still unclear how the remaining directors would convene a board of directors meeting if there is no chairperson, or if the chairperson is unable to perform his or her duties. In addition, the authority of the remaining directors acting in the name of the board of directors, in matters concerning the holding of the shareholders meeting, as prescribed in section 83 of the PLCA, has yet to be clearly defined.

The Clarification on Holding a Board of Directors Meeting was issued to clarify that if a quorum cannot be formed due to vacancies on the board of directors, the remaining directors will be able to take actions in the name of the board of directors to hold a shareholders meeting without delay (but no later than one month from the date the number of directors falls below the number required for a quorum), in order to elect directors to fill all of the vacancies. This is irrespective of whether the remaining directors include the chairperson.

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