Learn why Board Meeting Minutes really matter in your organisation and how to improve the minutes process. Resources from this article are derived primarily from BoardPro’s ‘Board Meeting Minutes Template’, if you’d like to download the complete document.
THIS ARTICLE’S KEY TAKEAWAYS:
- Minutes are an official record of actions the board or committee took at a meeting
- A systematic minutes meeting procedure further protects your organisation and creates trust
- You can utilise minutes in various ways (e.g. legally, to track progress, record actions, etc)
7 Reasons you should care about the quality of your minutes
“Minutes are an official record of actions the board or committee took at a meeting, not a record of everything that was said. They serve a historical purpose, but just as important, they serve a legal purpose, documenting the group’s adherence to the proper procedures and the association’s bylaws. And minutes and recordings made during a meeting are discoverable in litigation, so it is imperative to be prudent about what you include.” The Center for Association Leadership
1. To be legally compliant
It is a widespread legal requirement for incorporated bodies to keep a written record their boards’ decisions. It is critical to record proceedings in order to display your boards’ consistent competence and integrity. Inadequate minutes could lead to vulnerability for a corporate entity’s legal protections, so keeping a systematic procedure protects organisations.
2. To demonstrate the integrity of process
Minutes are a record of important organisational transactions. Minutes helps keep a record both for the board members and third parties. If a board’s decisions were ever placed under the microscope, the records are kept to show procedure was followed.
The process of producing minutes is as important as what they contain. That is why, for example, after minutes have been approved and signed by the chair as a true and correct record they should not be altered. If there is subsequent disagreement with a decision, and the board has second thoughts, it is not the minute book that should be changed, but the decision – at a subsequent meeting.
3. To protect organisational and director reputation
Commonly boards will have to acknowledge and deal with potential conflicts of interest. This is important to protect the reputation and integrity of the corporate entity and also the reputation of individual board members. By recording the process and steps taken to produce results it reduces the risk of accusations, increases trust within the entity and strengthens the decision making process.
4. As a basis for decision evaluation and review
“Boards need to be able to demonstrate that, for example, they received sufficient information and advice from reasonable sources, that such information and advice was properly interrogated, and that appropriate discussion occurred before the board made its final choice.
Minutes that record the thinking on which a decision was based, are also an important starting point for the board’s own post-decision evaluations. If, for example, a project the board approved did not meet expectations, were there flaws in the original decision making process or its subsequent implementation oversight that it could learn from?” BoardPro
5. To clarify responsibility and track action
The board minutes often contain details about the responsibility of further actions to take for specific matters. The board minutes are a reference point for tracking who is responsible for certain tasks, creating high visibility and trust within the board.
6. To facilitate due diligence
“Auditors have an obvious interest in a board’s minutes, but board records are also an important source of information for others who may be entitled to access board records. For example, directors considering joining the board would want to know about potential risks and liabilities. In a sales process a prospective purchaser, and in a merger situation a potential partner, may have similar interests. If it turns out there are significant errors or omissions, or if the minutes are misleading, it may lead to trouble for those who approved the original minutes” BoardPro
7. As a record of an organisation’s history
Board meeting minutes record an organisations long term history which can be important for times reflecting to make improvements. It also helps when introducing new directors and senior executives. Giving the new executives an understanding of the origins, what has been discussed and what was achieved. This will help align new directors with the existing board, helping understand existing and future challenges.
Meeting minutes template
You can access BoardPro’s full resources meeting minutes PDF and template here: https://www.boardpro.com/board-meeting-minutes-template
About Greenfields Recruitment & Search
GREENFIELDS RECRUITMENT & SEARCH is a specialist In-House Legal Counsel, Company Secretary and Corporate Governance Executive Search & Recruitment firm. We connect company secretary leaders with organisations who require company secretary services. Partnering with a diverse range of clients, from ASX listed organisations, non-listed organisations, multinationals, boutiques and not-for-profits across all industry sectors. Learn more about us here.