Are your board minutes up to scratch
30 November 2016
In the absence of substantive advice or regulation on minute taking at meetings of a company’s board of directors, ICSA (the Governance Institute for Company Secretaries) has published guidance on this. The guidance states that minutes should “provide an accurate, impartial and balanced internal record of the business transacted at a meeting.”
What should minutes include?
ICSA’s guidance is general and principles based, rather than a prescriptive set of rules. They acknowledge that there is no “right way” to take minutes but that it is more than just an administrative formality. As a minimum however, minutes should cover:- the key points of the discussion;
- the decisions that were made;
- the reasons for the decisions;
- the agreed actions.
Should minutes be comprehensive or concise?
It is not sufficient for minutes to simply record directors’ decisions - they should go beyond this and explain the reasons why decisions were made. The level of detail must enable anyone not present at the meeting to follow what went on. Somewhat confusingly, the guidance recommends that minutes are fairly concise and it is for companies to determine the level of detail they think is appropriate.Minutes as evidence
Minutes are the evidence of the proceedings at a meeting. They can be a useful tool to show that the directors have fulfilled their statutory duties or duly considered the risks associated with a proposal. It is therefore important that minutes are accurate and directors should approve the draft minutes in order to ensure this. Any amendments should not be an attempt to re-write history however, as the purpose of minutes is to record the actual events of a meeting and not what ought to have happened.ICSA advises that any audio recordings or written notes made to assist with minute drafting should only be kept until the minutes are finalised. This is to avoid confusion by creating an alternative record of the meeting. Although minutes are largely produced for a company’s internal use there is always a risk that they might become public, for example if they were disclosable in legal proceedings.
Practical points
To sum up, minutes should:
- be drafted in reported speech format;
- not be a verbatim record of the meeting;
- be reasonably concise;
- focus on the decisions made and the reasons for them;
- generally not identify individuals; and
- be approved at the following meeting.
Minutes are legally required to be kept for ten years but ICSA recommend retaining them for the duration of the company’s existence.
Read the full guidance here.