The Do's and Don'ts of Board 'In Camera' Meetings
‘In camera’ essentially means a private meeting, and in the board sense relates to a board meeting (or portion of a board meeting) which is restricted to the members of the board and (unless specifically invited) excludes all others such as the CEO, senior management, advisers, auditors, etc.
There are good reasons for holding in camera meetings, such as the instance of meeting to discuss the CEO’s pay or performance.
An in camera meeting might also exclude one or more members of the board as in the instance of a director with a potential conflict of interest, who is asked to step outside while the rest of the board discusses an item which involves that conflict.
Some board agendas start and/or finish with in camera sessions. At the start of meeting they are used to agree what the board members want to achieve in the meeting and at the end they are used to review the effectiveness of the meeting and evaluate performance.
Sometimes, an in camera session may be held to give directors a chance to talk freely in confidence and to ‘collect their thoughts’. Where there are clear differences in opinion, in camera sessions can provide an opportunity for the board to privately discuss differing points of view and agree a way forward. This allows the board to calibrate their approach as a single entity and develop their united front.
Directors might also hold in camera sessions to focus on their own training and development or to brainstorm board-specific ideas and policies that are not relevant to others.
When in camera meetings are positioned effectively they can help the board to be efficient and focused. They enable the board to freely discuss matters without needing to concern themselves with unnecessary diplomacy or needing high-degrees of sensitivity.
However, they are an area that require careful managing. Thought and consideration must be given to the perceptions and feelings of excluded parties to ensure the board does not lose the trust of the senior management team in the process.
The board needs to ensure it communicates the purpose for any in camera meeting and should include the rationale for the meeting being conducted ‘behind closed doors’.
The board should also give consideration to how it communicates the outcomes of any such in camera meetings. For example, will providing context for any decisions made, make it easier for affected parties to absorb or will more context just serve to make other parties feel more excluded from the matter decided?
For these reasons it might be appropriate to give time and effort to explaining the reason for in camera meetings to third parties before they are conducted and then following this up with a short debrief after the meeting to explain what was discussed and what outcome was reached.
Being open and honest is best practice where possible. The excluded party will feel uncomfortable if they do not understand why they are excluded. It is a sinking feeling to be asked to leave the room without explanation and then invited back in without any reference to what occurred while you were absent. It is human nature to fear the worst.
A simple explanation; “as part of protocol, we need you to step outside while we discuss the idea of the merger and whether your interest is a conflict of interest”, or “could we ask you to give us a moment while we evaluate the results from your performance review” is all that is required at the beginning. Upon return, you need to give a brief summary of what happened and where you are at, such as “we haven’t reached a conclusion as yet, the nominations committee will pick this up and give us some recommendations at the next meeting”.
The board is not obliged to explain the reason for the meeting and in some highly sensitive situations may even be unable to give a reason. However, this does not negate the requirement for professionally managing the thoughts and feelings of the management team and maintaining their ongoing trust and respect as much as possible. There is a difference between behaving sensitively and behaving secretly.
At all costs, the board must avoid creating a ‘them’ and ‘us’ faction on the board.
Ironically, the more frequently a board holds in camera meetings, the more desensitised the management team becomes to them and the less suspiciously they are viewed.
The Chair should ensure that in camera meetings maintain respectful discussions of the business. They might be used to let the board vent a little but should not deteriorate into an opportunity to bitch and moan about what is and what isn’t happening.
They are to be viewed as a private forum where the Non-Executives can check-in with each other and try to understand group sentiment.
In camera meetings are minuted and documented separately and confidentially to the board meeting minutes and not made available to anyone outside of the in camera meeting. Just like Board Meeting Minutes, in camera minutes can provide evidence (beneficial or damming, depending on your actions) in the event of a legal dispute.
The board minutes might refer to the in camera session; ‘Non-Executive directors met in camera and discussed the merits of the xxxx’. You do not have to explain what was said or agreed in the general board minutes.
Note that the Non Executives have to act in accordance with the terms of the Constitution or Rules, which may mean they do not have a quorum without the executives present or do not otherwise hold the powers to make decisions at in camera meetings.
It is a good idea to develop an ‘in camera’ policy or to add reference to in camera rules in the Board Charter. Outline when such meetings may be held, their purpose, what can and cannot be discussed, including any parameters and how these meetings are documented.
A executive team will respect that the board has the right to consider some matters privately. They will feel secure where these meetings are conducted as a ‘normal course of business’ to discuss specific matters of a sensitive, timely and confidential nature.
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