The Company Code of Mongolia allows the companies to decide on the organization and management of the BoD upon the approval of their Company Charter, and unless otherwise provided in a company’ s charter, the chairperson of the Board of Directors shall convene and preside at its meetings and supervise the preparation and retention of minutes of such meeting.
Moreover, the same Company code does not provide any explicit procedure on the convocation of the BoD’s meeting, in other words does not specify what type of communication / eg tele- and/or online conference/ shall be used for the such meetings. This ‘open’ regulation might be of interest to the foreign investors or businessman who live and work abroad and have company operations in Mongolia.
The subjects to be discussed at the BoD meeting and the Shareholder’s meeting also differ The Article 76 of the Company Code of Mongolia provides the list of subjects, which belong to the full authority of the Board of Directors, including but not limited to the ones listed below:
- The holding of regular and special shareholders meetings;
- Election and modification of the company’s executive body and determining its authority;
- Selection of the company’s auditor and establishment of the terms of the contract to be concluded with such auditor;
- Conclusion of the company’ s annual report of business operations and financial statements.
Such subject matters stated above shall be decided at the BoD meetings, and the Shareholders Meeting shall make a decision regarding the decision and/or conclusion made by the BoD. In other words, the Shareholders meeting shall approve the decisions made by the BoD. In particular, the Authority of the Shareholders’ Meeting includes:
- Consideration and approval of reports prepared by the Board of Directors with respect to the company’ s annual operations and financial statements;
- Other proposals submitted to the meeting by the decision of the Board of Directors and others. For such reasons, the companies shall know the different legal provision concerning these two authorities in order to avoid any adverse legal consequences that might occur.