Correspondence with Directors — Meaning, Importance and Occasions

1. Correspondence with Directors — Meaning, Importance and Occasions

Meaning: "correspondence with directors" means the written communication a company — almost always drafted and issued by, or under the authority of, the Company Secretary — addresses to its own directors in their capacity as directors (not to them as ordinary members of the public, and not the correspondence a director might send outward to third parties on the company's behalf). It is one of the most routine and most sensitive parts of a Secretary's daily work, because directors sit at the very top of the company's management and a badly drafted or a late letter to a director can create real legal, financial or governance problems.

Why this correspondence matters:

• Legal necessity. Several communications to directors are not optional courtesies but statutory requirements — a notice of a Board meeting under Section 173(3) of the Companies Act, 2013 is the clearest example; failing to give it properly can invalidate the meeting itself.
• Evidence and record. A signed, dated letter (of appointment, of a resolution passed, of a sitting fee paid) is the documentary proof the company keeps to show it has complied with the Act, and is what an auditor or an inspecting authority will ask to see.
• Good governance and relations. Directors, particularly non-executive and independent directors, often have no other daily touch-point with the company besides what the Secretary sends them — courteous, complete, and prompt correspondence keeps the Board properly informed and engaged, which is itself good corporate governance.
• Continuity. A well-kept trail of letters to directors (appointment, meeting notices, resolutions, sitting fees, committee memberships) gives the company an organised record of its own Board's history.

Common occasions on which the Secretary corresponds with directors (each is taken up in more detail later in this chapter or is a natural extension of it):

1. Appointment (or re-appointment, or co-option to fill a casual vacancy) of a director.
2. Notice, agenda and notes on agenda for a meeting of the Board or of a Board committee.
3. Intimation of a resolution passed at a Board meeting, especially to a director who was absent, or who must act on it.
4. Payment or revision of sitting fees and other remuneration.
5. Appointment of a director to a Board committee (such as the Audit Committee).
6. Intimation of retirement by rotation, or of the Board's decision on re-appointment. …