Board Minute Taking Guide
Importance of Meeting Minute Taking
Writing effective meeting minutes can be cumbersome and painful. BoardPro’s polling of governance pain points over the past three years shows that over 76% of respondents rated ‘minute taking’ as a significant pain point.
“76% of respondents rated ‘minute taking’ as a significant pain point”.
Minute takers for Small-Medium Businesses and Not for Profit organisations are often ‘first timers’ or inexperienced. Many of these organisations struggle to establish a good structure and fall into misconceptions, such as needing to record the entire board meeting verbatim. Many of our clients have also asked for a guide on how to take minutes. As a result, we decided to run a monthly training tutorial on this topic, which is now one of our most popular live tutorials.
Whilst we deliver training, we’re ongoing learners ourselves. We benefit from observing our client’s practices (when given permission to look) and draw from our own expert advisors such as Graeme Nahkies of BoardWorks. This article covers some of the main aspects of writing minutes and is based on one of Graeme’s own articles which we’ve adapted slightly and otherwise simply fleshed out with practical examples and links to related resources. Please note, however, that this commentary does not constitute legal advice. You should get specific legal advice if there is any uncertainty.
Why take board minutes?
Board meeting minutes are the guard-rails that hold organisations accountable to decisions made by the organisations’ ultimate leadership body, the board of directors. In most jurisdictions it is a legal requirement of incorporated bodies to keep a written record of the board’s decisions by way of meeting minutes. In New Zealand for example, Schedule 3 of the New Zealand Companies Act states the requirements to take official minutes of board meetings for registered companies. For NFPs, the Incorporated Societies Act 1908 outlines the requirements of taking minutes. Meeting minutes also serve as scrutiny should legal challenges come from internal or external parties. Case in point is the past legal action and ruling against the directors of Mainzeal in New Zealand. In a decisive victory for the Mainzeal liquidators, Justice Francis Cooke ordered the directors of the failed construction company, to pay $36 million to creditors.
"The decision highlights the importance of directors focusing on the complex risks they may be facing and making sure they are spending adequate time in the boardroom mitigating that risk, It also highlights the complexity of some of these operational environments and the responsibility that comes with some of these governance roles."
~Kirsten Patterson, CEO, Institute of Directors.
What to include in meeting minutes?
A Record of the Board Meeting & Key Decisions
The meeting minutes are not only a record of a board’s decisions but of the history and development of the board’s thinking about important matters. The more important something is, the more thorough the minutes with respect to it should be. Board meeting minutes should be written carefully but be balanced to ensure that they are neither too long nor too short. Legal advice has changed over the years. Once minimalist minutes (a record of decisions and not much else) were favoured. Today, more fulsome disclosure of a board’s thinking is considered appropriate. Apart from decisions, the minutes should include just enough to record the most important ingredients in the board’s thinking. It is normally neither necessary nor advisable to note who said what during the meeting. The objective is to document key information, the processes and meeting outcomes.
A Record of Procedural Matters
Board of directors’ minutes should be a record of procedural matters. Therefore, the minutes should disclose that the meeting has been duly constituted (e.g. that a quorum of members was present; that the minutes of your previous meeting were approved; date and time of next meeting, etc.) and adjourned and that applicable procedural steps have been taken.
A Record of Governance Process
Minutes should also record that appropriate governance processes were observed. Proof of the extent to which directors adhered to good standards of practice may become important in some circumstances.
Because it is difficult to hold directors individually and collectively accountable when decision-making processes are either not in place or are ignored, process minutes encourage a higher level of accountability and protect both the board and its stakeholders. Documents which form an important part of the board's decision-making should be referenced or even attached.
Declarations of Conflicts of Interest
Finally, declarations of directors’ interests (or of any other participant in the board's decision-making process) should be disclosed in the minutes. This should be accompanied by a record of the action taken to manage or mitigate any conflicts of interest. An example might be if an interested party withdraws from the meeting while a matter is discussed and resolved.