Israeli Government Companies Ban Hybrid Board Meetings, Stirring Controversy
Roi Kahlon, head of the Israeli Government Companies Authority, issued a directive several months ago mandating that board meetings of government-owned companies be held exclusively in person, banning hybrid meetings where some participants join via Zoom. Under the new rules, the board chair may decide if a meeting is fully in-person or fully remote, but mixing the two formats is prohibited. Directors attending remotely from outside company offices during in-person meetings will not receive payment. This policy has sparked significant backlash from the Directors Association, which has petitioned for its reversal and threatened to appeal to Israel's Supreme Court. Kahlon recently rejected their request.
The directive allows remote meetings only under specific "relevant circumstances," such as wartime conditions or urgent company needs, with the chair required to document reasons in the meeting minutes. Critics argue the ban is overly rigid, fails to reflect modern hybrid work realities, and could deter qualified directors who travel or live far away. Some directors emphasize the importance of flexibility, suggesting a cap on remote participation rather than an outright ban.
Supporters of the directive highlight the value of physical presence for effective oversight, informal interactions, and maintaining meeting quality. Kahlon stated the policy responds to abuses during the COVID-19 pandemic when some directors attended Zoom meetings while distracted or on vacation, undermining board effectiveness. The "worst" scenario, he said, is hybrid meetings mixing in-person and remote participants.
The Directors Association's CEO, Hadar Tzofiyof Cohen, insists the chair should retain discretion to permit remote attendance and criticizes the 60% pay rate for remote participation as unfair. Meanwhile, the Ohayon Center for Board Excellence supports the directive, citing international research that hybrid meetings reduce discussion quality and influence board appointments.
Approximately 300 directors serve on 68 government companies employing 58,000 people with assets totaling around 300 billion shekels. Before 2020, remote meetings were rare and only allowed in exceptional cases. During the pandemic, remote participation was broadly permitted with full pay, a practice that continued through recent conflicts but is now being curtailed. The debate continues over balancing modern work practices with governance standards in Israel's public sector boards.
