Kezia Farnham

Senior Manager

What is unanimous written consent?

Boards of directors gather as often as necessary to assess the company’s current and projected performance. Regular business meetings are appropriate and sufficient for most board issues. Still, specific issues are timely, and can’t always wait for an opportune time for boards to get together. The unanimous written consent process was designed precisely for this purpose.

Unanimous written consent is a formal decision-making process that empowers boards to act without holding a meeting. As long as boards follow the rules for unanimous written consent, boards can approve issues without having to meet. To help you use this process strategically and compliantly, we’ll explain:

• How unanimous written consent works
• The purpose of unanimous written consent
• A unanimous written consent example (with a template)
• Operational, legal and compliance considerations
• Advantages and disadvantages of unanimous written consent
• How does unanimous written consent compare to other decision-making processes
• Jurisdictional differences and best practices

How does unanimous written consent work?

Unanimous written consent allows boards and organizations to make decisions effectively even when they can’t meet. This process is particularly useful for routine approvals, urgent matters or when scheduling a board meeting would be impractical.

Instead of gathering to vote, boards do the following:

1. Draft the consent document: The board prepares a written resolution outlining the proposed action, including relevant details and legal language.
2. Distribute to all voting members: The board administrator then sends the document to all board members, shareholders or committee members who must approve the action.
3. Review and sign: Each member reviews the document and, if in agreement, signs it. Some organizations allow electronic signatures.
4. Ensure unanimous approval: All eligible members must sign for the consent to be valid. Even one dissent or missing signature invalidates the process.
5. File the document: The signed consent is recorded in the organization’s official records, such as corporate minutes or board meeting files.
6. Implement the decision: Once recorded, the action the consent outlines is officially approved and can be executed as planned.

The purpose of unanimous written consent

The ultimate purpose of the unanimous written consent is to streamline decision-making. Because all board members can approve an action in writing, they can act faster than their schedules would otherwise allow. This unlocks several benefits, including:

• Efficiency: Avoiding in-person or virtual meetings saves both travel and meeting time.
• Flexibility: With unanimous written consent, decisions can be made quickly without bottlenecking time-sensitive matters.
• Legality: This process retains a formal, documented record for approval that holds the same weight as a vote taken during a meeting.
• Unanimity: All eligible members must agree on an action before it takes effect, eliminating the need for discussion.

Unanimous written consent example

What does unanimous written consent look like in practice? Imagine a technology company’s board of directors is presented with an opportunity to merge with a larger competitor. The deal requires the board members’ approval, and there is a time-sensitive deadline to finalize the agreement.

Since scheduling a board meeting could delay the process and jeopardize the deal, the board members can decide to use the unanimous written consent to approve the merger.

Template for unanimous written consent for the board of directors

In the above scenario, the board would’ve used a unanimous written consent template like this:

[Company name]

Unanimous written consent of the board of directors

The undersigned, being all of the members of the Board of Directors of [Company name], a [State] corporation (the “Company”), hereby consent to the adoption of the following resolution, effective of the date set forth below:

RESOLVED, that the Board of Directors of [Company Name] hereby approves the [specific action being approved] and authorizes [name/position of person] to take any and all necessary actions to carry out this resolution.

This consent shall be valid and effectual as if adopted at a meeting of the Board of Directors duly called and held.

IN WITNESS WHEREOF, the undersigned have executed this Unanimous Written Consent as of the [date].

[Director Name]
Signature: ____________________________
Date: ________________________________

[Director Name]
Signature: ____________________________
Date: ________________________________

[Director Name]
Signature: ____________________________
Date: ________________________________

Operational, legal and compliance considerations for unanimous written consent

Unanimous written consent may sound like a slick alternative to lengthy board meetings. The reality is that even unanimous written consent has specific operational, legal and compliance requirements that the board must consider to ensure the process is genuinely binding. These include:

1. State laws: It’s imperative that boards fully understand their state’s laws and the requirements for board meetings and voting. State laws contain the standards for the board’s guidelines for meetings and voting. (See examples of jurisdictional differences below.)
2. Corporate bylaws: Their company’s bylaws may also have limitations, conditions or exclusions regarding the holding of official board meetings. Boards should know when meetings require prior notice and whether they can meet by phone or videoconference.
3. Signature processes: For boards to be able to take action on an item without holding an actual board meeting, all board directors must consent to the action in writing or by electronic transmission. Depending on the bylaws, board directors can give their consent using a PDF, with an executed signature page sent via facsimile, using an e-signature, via a board portal or using an email transmission indicating their approval.
4. Timeliness: All eligible voting members must receive the consent document promptly. Delays in distribution can affect the decision’s validity, particularly when time-sensitive matters are at stake.
5. Document clarity: The written consent should be legally sound and unambiguous. Vague or overly broad language can lead to legal challenges, so the resolution should clearly specify the action, the parties involved and any required authorizations.
6. Quorum and voting requirements: Ensure all eligible voting members are included. Sometimes, a specific quorum or number of votes is required to validate a decision, even in written consent situations.
7. Consistency with governance processes: Unanimous written consent shouldn’t replace other formal governance procedures unless allowed by the bylaws. For significant decisions, holding a formal meeting and record meetings may still be necessary even if the full board agrees.
8. Tax and regulatory implications: Some actions, such as financial decisions or asset sales, may trigger specific tax or regulatory reporting requirements. Ensure that the actions approved by the unanimous written consent comply with all tax laws and industry regulations.

Advantages of unanimous written consent

Unanimous written consent is appropriate for situations in which a company needs a time-sensitive matter approved in short order or if the company has directors working from different time zones. Using this process enables the board to:

1. Act quickly: Unanimous written consent is a viable solution when board directors need to vote, everyone is in solid agreement, and there's no time for prior notice or planning a special board meeting. This process only works when all board directors approve via their signatures or electronic approvals. If even one board director abstains or fails to deliver their consent, the unanimous written consent process isn’t valid. Using specific wording for unanimous consent approvals on forms isn’t necessary. Many corporations consider it in keeping with best practices to include language for unanimous consent that mirrors state laws or their bylaws so that there can be no doubt as to the intent of the board directors’ votes.
2. Defend decision-making: Given that written consents are required to be unanimous, third parties can be assured that boards performed their due diligence in documenting that the board solidly supported a specific action.
3. Oversee daily activities: Unanimous written consents efficiently manage day-to-day matters, such as approving option grants and official contracts, where time is of the essence.
4. Reduce pressure: Each board member can take their time reviewing the resolution before signing rather than feeling pressured to decide in real-time during a meeting. This can allow for more thoughtful, deliberate decision-making without external influence.
5. Cut costs: Board meetings can be resource intensive, from travel to preparing board books to other meeting-related expenses. Unanimous written consent also reduces the need for extensive meeting logistics, such as venue booking or catering.

Disadvantages of unanimous written consent

Despite their many benefits, unanimous isn’t a decision-making silver bullet. Even this flexible and often streamlined process can trigger some roadblocks.

1. The board may need to meet anyway: In the unfortunate situation that a board moves for unanimous written consent and any board director opposes the action, it takes the board back to having to call an official meeting and follow all bylaws and other meeting procedures, including rules for prior notice, quorum and the required vote. For this reason, if there is doubt that one board director may not offer a ‘yes’ vote for a unanimous written consent, it’s best to plan for a meeting rather than waste everyone’s time. If a meeting becomes necessary, it also allows management to be present and to go on record as supporting the action in addition to the board, which would be reflected in the board meeting minutes.
2. Boards can make uninformed decisions: Unanimous written consent doesn’t allow discussion or debate. As a result, board members may approve resolutions without fully considering alternative perspectives or potential risks.
3. Members may misunderstand the resolution: Without a live discussion, members may misinterpret the intent or implications of a resolution. Questions or concerns must be addressed individually, which can slow down the process if multiple board members need clarification.
4. Board members may disengage: Unanimous written consent doesn’t engage board members as a meeting does. Overlying on this process could weaken board dynamics by reducing opportunities for collaboration and strategic discussion.
5. It lacks transparency: Unlike in-person or virtual meetings, where stakeholders can observe decisions, unanimous written consent occurs behind closed doors. This lack of visibility may raise concerns about accountability and inclusivity, particularly in nonprofit or publicly traded organizations.
6. It can be insecure: Some boards conduct unanimous written consent via email. While legal, it’s not a safe way to conduct a legal board vote. Unless board directors use a highly secure board management software system to cast their votes, personal or business emails are at risk of being hacked. There’s no way to know if each board director voting is who they say they are.

Jurisdictional differences in unanimous written consent

Procedures and legal requirements for unanimous written consent vary across jurisdictions, depending on corporate laws, regulations and an organization’s governing documents. Below is an overview of how unanimous written consent can differ in corporate law environments.

Delaware unanimous written consent

Delaware is a popular corporate jurisdiction due to its business-friendly laws and well-established legal precedents. The state’s General Corporation Law permits corporate boards to take action by unanimous written consent without a meeting, provided all board members approve the action in writing.

Stockholders can also take action by written consent, but the corporation must notify all stakeholders who didn’t consent if the action is less than unanimous. In either case, the consent becomes part of the corporate record once executed.

California unanimous written consent

California has stricter corporate governance requirements, particularly for corporations operating within the state or those classified as “quasi-California” corporations — corporations incorporated elsewhere but with significant operations in the state.

California Corporations Code permits boards of directors to take action with unanimous written consent if all board members approve it in writing. Unlike Delaware, California also requires unanimous consent for shareholder action unless the company is publicly traded, in which case majority consent is allowed.

Strict notification requirements apply to any action taken by written consent. Specific actions like mergers or dissolutions still require a formal meeting.

New York unanimous written consent

New York Business Corporation Law allows corporate boards to act by unanimous written consent without a meeting, much like Delaware and California. Shareholder action requires written consent by default unless the corporation’s incorporation certificate says otherwise.

Unlike California, New York doesn’t impose special rules on out-of-state corporations operating within the state. Filing requirements vary, but corporate records must include written consent for audit and compliance purposes.

Best practices for implementing unanimous written consent

Effectively implementing unanimous written consent requires careful planning, compliance with legal requirements, and the use of technology to streamline the process. Below are best practices to ensure smooth and legally sound unanimous written consent procedures.

1. Verify legal and governance requirements: Review state laws and corporate bylaws to confirm that unanimous written consent is allowed and if additional procedures apply. This ensures the process you create is legally valid.
2. Draft clear and precise consent documents: Use a standardized template for unanimous written consent — like the above — to maintain consistency and make it easier to deliver consent promptly. Clearly state the proposed action, the authority under which it is taken, and any supporting details.
3. Utilize secure technology for efficiency: While many laws allow for unanimous written consent via email, board management software is more secure and efficient. Use software to request e-signatures, track approvals, store documents, and maintain an audit trail.
4. Maintain proper recordkeeping: File executed written consents with the corporate secretary or legal department to ensure adequate documentation. Keep copies in corporate records as required by laws or internal policies to demonstrate compliance quickly in case of audits or disputes.
5. Encourage timely execution and communication: Set clear deadlines for obtaining signatures to avoid delays in decision-making. Notify all directors or shareholders in advance to address questions or concerns before execution. Distribute a finalized copy to all relevant parties to foster transparency among board members.
6. Regularly review and update policies: Review your bylaws and corporate governance policies to verify that they align with current laws and best practices. Train board members and executives on proper procedures for written consent to avoid legal or procedural missteps. Conducting an annual audit of unanimous written consent-related governance practices can also go a long way to supporting and proving strong decision-making.

Streamline unanimous written consent with a board portal

Unanimous written consents are too important to get wrong. Yet, many boards rely on email or paper-based methods that can compromise the integrity and efficiency of the entire process.

Diligent Boards, part of the Diligent One Platform, offers a foolproof way to vote by unanimous written consent. Secure access controls mean only authorized users can access the system, and purpose-built voting tools invite board directors to weigh in expediently on any electronic device without compromising security. Diligent Boards also includes secure communication features, so board members can ask questions and engage in discussions from anywhere — not just the boardroom.

Board management software simplifies unanimous written consent with:

• Secure document storage and sharing
• Access from any device, including mobile phones and tablets
• Real-time notifications with granular permissions
• Tools to review, vote and sign from anywhere

Learn more about Diligent Boards or request a demo to see how it can help your board make better decisions — faster.