In recent years changes to electronic technology and the law (Section 248D Corporations Act) have allowed directors to attend board meetings by telephone, video conferencing or over the internet. But does that result in an effective meeting?
I suspect that the two James Hardie non-executive directors who attended the February 2001 board meeting,by telephone and video from the USA in hindsight would have preferred to be at the meeting in person. (That meeting is the subject of ASIC v MacDonald,)
Whilst urgent single issue meetings can be effectively dealt with remotely provided all relevant documents are circulated, other meetings may be more successful if they are “face to face”. With all directors present in person there could be better board interaction and understanding of the issues and even what is actually agreed.
There is a risk that directors attending remotely can get distracted the longer the meeting takes even if they have all documents being discussed. What happens if the remote directors are disconnected? What if documents are tabled that the remote directors do not see?
The James Hardie penalty decision may have more to say on this issue.