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Making Compliance Work: A Short Overview of Board Minutes

minutes of meeting format,types of meeting minutes,sample meeting minutes format

Making Compliance Work: A Short Overview of Board Minutes

This post considers:

  • The styles of meeting minutes.
  • Why companies must keep board minutes;.
  • What is ordinarily talked about at a board meeting;
  • What should go into board minutes; and.
  • The way to draft, sign and store board minutes.

 
What types and why do we need board minutes?
Board minutes are needed for both legal and practical reasons.
Under the Companies Act 2006, every company is obligated to take minutes of all proceedings of its directors, which must then be maintained for 10 years from the date of the business meeting.
The company’s articles of association (its constitution) might also obligate this to be carried out. For example, the current form of government prescribed articles for UK companies (which many companies opt to take on) require directors to keep records of their judgments.
Apart from the legal requirement to do so, there are definitely good practical reasons for having board minutes including:
having a log of decisions, useful as a prompt to attendees, to brief any director who could not participate in the meeting, and for long term internal record purposes;
showing that the directors took their decisions properly, in accordance with their duties, particularly if the decision might be disputed down the road.
What is usually discussed at a board meeting?
Executive Directors will make decisions about the day-to-day control of the company at a board meeting, often abiding by an agenda or sample meeting minutes format. They will typically:

  1. Consider the minutes from the last meeting and any matters arising from them;
  2. go over the company’s activities and performance since the last meeting (e.g. sales reports, ongoing projects, product or technical progressions, issues arising from the company’s operations);.
  3. explore the prospects for the business and strategic concerns arising;
  4. evaluate the company’s financial position incorporating performance against budget;
  5. resolve any procedural matters e.g. appointment of a new board member;.
  6. Visiting expert information providers, (invited in at certain key and appropriate points) i.e., solicitors, compliance experts etc;
  7. Look at risks and their supervision (e.g. competitive landscape, supply chain issues);

Now and again, it may be needed to have a one-off board meeting to approve a key business decision like the acquisition of a new business, the sale of one of the company’s subsidiaries, changes to the company’s share capital structure, or the taking out of a new business loan.
Any decisions made at a board meeting would typically be made by a straightforward majority, with voting on a show of hands. You should always check your company’s articles of association as these documents determine the voting rights at meetings.
What should be in the board minutes?
Though there is no set minutes of meeting format for board minutes, the following need to be included as a minimum;.

  • The registered name and number of the company.
  • The date, time and place of the meeting.
  • The names of the directors (and any others) that attended and particulars of any who sent apologies.
  • The name of the person serving as chairperson (if any).
  • Confirmation that notification of the meeting has been given and a quorum is in attendance, i.e., the meeting is quorate and can make decisions.
  • Declarations of the directors’ interests in the matters being covered, where required.
  • Approval of minutes of previous meeting.
  • A short description recording the matters reviewed or approved and decisions taken at the meeting. If a resolution was passed, the minutes should record the particular text of that resolution.
  • A note of any investigation or research required by any one of the company’s officers, and a precis of the remit and/or authority. For larger projects a terms of reference should be agreed as an addendum to the minutes.
  • A note of any instructions to the company’s officers e.g. to make any filings with Companies House or any other regulatory authority, or changes to the company’s statutory books and registers.
  • A note of the time limits of the company officers guidelines, i.e., when they will have to report back or confirm completion. If confirmation of completion is required, by what medium or process is it to be socialised within the board?

Tips for preparing, signing and storing board minutes.
Board minutes should not be a verbatim record of every little thing that was said or debated. Rather, they should describe any briefing papers considered and set out a concise description of the key points of any discussion, with enough detail for someone not present to have a comprehension of the main reasons for the decision.
The board minutes can be signed by any one of the directors, but are most commonly signed by the chairperson of the meeting.
Dependent on any specific requirements in a company’s articles of association, board minutes could be saved in
( a) hard copy or.
( b) electronic form.
as long as the hard copy may be produced.
If the minutes are not stored in bound books, the company must take precautions against falsification of the records.
Lee Werrell, Chartered FCSI and owner of Compliance Consultant states, “As with all good compliance; it’s not what you do, it’s what you wrote down that you did.”.
Lee Werrell is a Governance, Risk & Compliance professional with 30 years experience in the financial services industry, including roles at board and senior executive level for banks and other distribution channels. Contact Lee on 0207 097 1434 or through the website at https://www.complianceconsultant.org.
 

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