Preparing board of directors meeting minutes is an important task for all types of corporations. Having accurate minutes can help avoid litigation. Also, accurate minutes assist with managing future litigation risk.
To avoid litigation risk, board of directors minutes must provide an accurate record of board decisions. The minutes should also contain a record of any board due diligence. Finally, evidence of directors’ good faith intentions and absence (or resolution) of conflicts of interest should also be recorded.
The following tips are essential for preparing board of directors’ meeting minutes:
- Do not rely on emails or text messages to serve as board minutes. These type of messages can easily be taken out of context and are not a replacement for board level deliberations. These type of messages are often subject to discovery in litigation.
- Follow the board agenda when preparing the minutes. Often, the agenda serves as a guide to prepare the minutes. All of the agenda schedule and any related topics should be listed in the minutes.
- Circulate draft minutes promptly after the meeting. Any delay affects the accuracy of the minutes. Also, directors’ memories fade over time.
- Clearly state the board’s final decision. Provide some brief reasoning and background for board decisions. Add ‘whereas’ clauses to assist with the explanation of board decisions.
- Include an explanation of the expert materials or expert testimony the board used to reach a decision.
- If the board does not reach a formal decision on a particular topic then provide the reasoning for the non-decision. Also provide evidence the board carefully considered the issue before reaching no decision. If further action is warranted to reach a decision then state why and what action is necessary.
- All communications with the board’s legal counsel should be recorded in a manner that is easy to redact or to mark confidential. Board minutes are subject to discovery in litigation. Ensuring the confidentiality of past board communications with its legal counsel is important to defending corporate lawsuits.
- The minutes are not a transcript of the meeting. However, they must provide a complete and accurate description of the board’s actions. Accordingly, they do not usually identify individual directors as speakers or include direct quotes by directors.
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