Why Are Board Meeting Minutes Important?
In the court of law, minutes are given considerable evidentiary weight. They can provide crucial evidence that directors have fulfilled their fiduciary duties. Well-taken board minutes highlight corporate decisions, show compliance with legal obligations, and can reduce misunderstandings regarding the board's decisions and discussions.
What Should Be Included in Board Minutes?
Effective board meeting minutes must capture the essence of the discussion, the decisions made, and the reasoning behind those decisions. They should also record any director dissents accurately. Elements to be included are attendance, an outline of the meeting's agenda, actions, and decisions taken, and an overview of the discussion, including differing points of view.
What Can Happen if there are No Proper Board Minutes?
The consequences of lacking proper minutes can be severe. Without them, directors may find it challenging to defend their actions and decisions legally. The James Hardie case serves as a stark reminder of the perils of inadequate minute-keeping (ASIC v MacDonald (No 11) (2009) NSWSC 287).
How Does the AICD Support Directors with Board Minutes?
The AICD provides guidance on the purpose, form, and function of board meeting minutes. Together with the Governance Institute of Australia, the AICD issued a joint statement on board minutes in August 2019. This statement directed the ongoing discussion about this topic and outlined the key principles, considerations for minute content, and the approach to board papers and document retention policies.
In conclusion, board meeting minutes are a vital aspect of good governance. By providing an accurate and detailed record of board meetings, they help to promote transparency, accountability, and guide decision-making processes.