A discussion about corporate governance best practices and how to run a board meeting as effectively as possible would not be complete without addressing board meeting minutes.
“Minutes matter,” writes Habitat magazine. “They can be used to defend the board in court,” as well as to “explain actions to shareholders (and future boards).” They are so important that the National Council of Nonprofits is named one of its 5 Basic Good Governance Practices.
But recognising the value of board meeting is only half the battle. Mastering this aspect of the meeting process is not just about recording complete and accurate notes. Taking better meeting minutes requires multiple signings, from the planning to the future.
Overall, assess and fine-tune the process – starting with three distinct and equally important parts.
Reviewing the agenda
The road to a meeting begins with a board meeting agenda. According to financial services company HSBC , the agenda should reflect the company’s agreed-upon board meeting objectives, cite the specific issues in need of discussion and cross-reference board meeting documents. As the company notes, do not forget to take the minutes from the previous board meeting, both for approval and to give directors a chance to “add points which have been left out.” In essence, the agenda is a guidebook intended to help directors navigate the meeting productively and efficiently.
A board meeting agenda can only achieve this, however, if board members have had an opportunity to see it. That is not always the case.
In an article for Inc. Magazine , Mark Suster, managing partner with venture capital firm Upfront Ventures, addresses the importance of distributing agendas and related board meeting documents in advance. “The mistake most founders make is last-minute board packs,” he writes. “Investors sit on many boards and have many other job tasks, so often if you get a day off and you’re in back-to-back meetings and a dinner, you’re only likely to have a look at the book materials prior to meeting. “
Need to take better meeting minutes? Use this meeting to make sure you are ready for your next meeting.
Understandably, this can have a negative effect on the meeting and on everyone involved. If directors are unable to tackle the issues at hand, the meeting could become a wasted opportunity. While it may seem like a glimpse at the board meeting unscathed and with few questions, ” Inc. Magazine notes ,” finding resources “and” the opportunity to really think about the long-term issues you ” re facing. ” The author suggests 72 hours – or better still, a week – before the meeting.
Aside from preparing and distributing the agenda ahead of time, by prioritizing the issues that matter most, whether they are related to sales or marketing, finance and legal, human resources, or research and development. In another article for Inc. Magazine , data analytics company First Rain’s executive chairman Penny Herscher Explains, “You will most likely have a full board’s attention for a limited time period – be it two hours or six – you want to use this time as Efficiently as That means you need to focus on what’s not working, not what is. ” This approach can help make the most of your meeting time.
Capturing What’s Critical
No matter how reliable their memories are, directors and C-suite leaders can benefit from a detailed recap of every board meeting they attend. According to law firm Berding & Weil , board meeting minutes should include all actions considered by the board, which motions were made, and / or motions were approved. Personal observations and quotes do not belong in meeting transcripts, but noteworthy events like late arrivals and early departures do. What exactly does such a document look like? In another article on how to take board meeting minutes, accounting and advisory firm DeLeon & Stang recommended did boards adopt the Following format:
Attendance, which can be as easy as it is, and has a sign-in sheet for any visitors
Approval of prior meeting minutes and financial statements from the previous month
Review of “old business” – that was discussed in a previous meeting that has not been resolved
Discussion of “new business” so you can make use of a board meeting minutes template to streamline the process, as we have noted at Diligent , to reduce stress and maximize meeting efficiency.
Another best practice has been completed. In California, for example, minutes can become “prima facie evidence” of the California Corporations Code, according to Berding & Weil.
Nonprofit resource the Foundation Group puts it like this: “Once signed, the minutes become a legal binding copy.” Keeping minutes is important in an event when board meetings are often recorded with smartphones and other devices. If there is a difference of opinion about a decision made during a meeting, the minutes become the company’s go-to source for confirmation. “Without meeting minutes, to organization does not have proof of what’s being done in the board room,” writes the Foundation Group.
The task of taking better board meeting does not end when the meeting does. Companies must distribute those minutes to the board of directors.
Network for Good’s Nonprofit Marketing Blog , which offers a nonprofit board meeting agenda, 24 hours of the meeting. This ensures “ideas and action items are fresh in everyone’s mind.” Attendees – who have already returned to their hectic daily routine – want to follow up on their assigned task or research, and want to arrive at the next meeting with a positive progress report.
Acting almost after the meeting so gives your directors a chance to speak. Even the most skilled corporate secretaries make mistakes, and as nonprofit organization the National Association of Veterans’ Research and Education Foundation points out, board members have “ an obligation to care fully review the minutes of each meeting for accuracy.” This includes making necessary corrections, comments or objections.
If the error has been made, follow the Houston Chronicle’s advice : Determine what the issue is, make the correction quickly and share the minutes with the board. To avoid confusion, indicate that the revised minutes replace the previous document.
With board portal software, expect this process – along with minute-taking and distribution in general – to be easier. The advantages of using the software range from security (board meeting minutes and other sensitive documents can be stored on a secure platform) to convenience (with board portal software, minutes can be shared with board members all over the world with ease).
In the multifaceted world of board management, minutes may seem of minimal importance, but they are essential to board meeting success.