A discussion about corporate governance best practices and how to run a board meeting as effectively as possible wouldn’t 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’re so important that the National Council of Nonprofits named maintaining board meeting minutes as one of its 5 Basic Good Governance Practices.
But recognising the value of board meeting minutes is only half the battle. Mastering this aspect of the meeting process isn’t just about recording complete and accurate notes. Taking better meeting minutes requires that companies follow multiple guidelines, from planning ahead to being selective about what’s recorded and implementing a strategy for sharing the resulting information.
To position yourself to take better board meeting minutes and to maximise your board meetings overall, assess and fine-tune the process — starting with these three distinct and equally important parts.
Reviewing the Agenda
The road to a constructive 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, all while being relatively brief. As the company notes, don’t forget to include 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 isn’t 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 well in advance. “The mistake most founders make is sending out last-minute board packs,” he writes. “Investors sit on many boards and have many other job tasks, so often if you get a deck the day before and you’re in back-to-back meetings and a dinner, you’re only likely to have a cursory look at the materials prior to meeting.”
Need to take better meeting minutes? Use this meeting minutes kit to make sure you are prepared for your next meeting.
Understandably, this can have a negative effect on the meeting and on everyone involved. If directors aren’t sufficiently prepared to tackle the issues at hand, the meeting could become a wasted opportunity. While it may “feel like a victory if you get through the board meeting unscathed and with few questions,” Inc. Magazine notes, such an outcome wastes “valuable resources” and the opportunity to “really think about the long-term issues you’re facing.” The author suggests that upper management supply board members with the agenda 72 hours — or better still, a week — before the meeting.
Aside from preparing and distributing the agenda ahead of time, management can set itself up for success by prioritising the issues that matter most, whether they’re related to sales and marketing, finance and legal, human resources, or research and development. In another article for Inc. Magazine, data analytics company FirstRain’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 possible. That means you need to focus on what’s not working, not what is.” This approach can help the board make the most of its 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, the motions that were made, and whether or not these motions were approved. Personal observations and quotes don’t 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 that boards adopt the following format:
Attendance, which can be as easy as just writing down who is there and who is not, and having a sign-in sheet for any visitors
Approval of prior meeting minutes and financial statements from the previous month
Review of “old business” — anything that was discussed in a previous meeting that has not been resolved
Discussion of “new business” — new items that need the attention of the board Companies can also employ a board meeting minutes template to streamline the process, as we’ve noted at Diligent, to reduce stress and maximise meeting efficiency.
Another best practice is having the board secretary sign the notes once they have been completed. In California, for example, minutes can become “prima facie evidence” of truth under 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 particularly important in an age when board meetings are often recorded with smartphones and other devices. If there’s 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, an organisation does not have proof about the decisions made in the board room,” writes the Foundation Group.
The task of taking better board meeting minutes doesn’t end when the meeting does. Companies must distribute those minutes to the board of directors.
Network for Good’s Nonprofit Marketing Blog, which offers tips on everything from setting a nonprofit board meeting agenda to preparing a board meeting notice, advises companies to share minutes within 24 hours of the meeting. This ensures “ideas and action items are fresh in everyone’s mind.” The faster you share those minutes, the better the chances that meeting attendees — who have already returned to their hectic daily routines — will follow up on their assigned tasks or research, and will arrive at the next meeting with a positive progress report.
Acting fast after the meeting also gives your directors a chance to voice any concerns that they may have about the contents of the minutes. Even the most skilled corporate secretaries make mistakes, and as nonprofit organisation the National Association of Veterans’ Research and Education Foundation points out, board members have “ an obligation to carefully review the minutes of each meeting for accuracy.” This includes making necessary corrections, comments or objections.
If an error has been made, follow the Houston Chronicle’s advicee: Determine what the issue is, make the correction quickly and share the amended 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 significantly easier. The advantages of using such 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’re essential to board meeting success.
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