As I write, I’ve just finished reviewing the draft minutes for a board meeting we held last week.
Why do many chairs and directors see this as largely a chore – and do they give the minutes the attention they really need? Are they ensuring that the minutes reflect accurately the decisions the board took, and the tone of the meeting; or do they spend their energy – and feel triumphant – uncovering the trivial typo or incorrect use of punctuation (we all know one of those, don’t we)?
For me, the minutes need to satisfy two needs:
- First, when approved by the board, the minutes become the formal and legal record of what the board said and decided – a record that becomes permanent.
- Secondly, the minutes are a reference point for board members who need to look back, perhaps years later, at how they got into a particular position.
Here, then, are my Six Steps to More Meaningful Minutes:
- When signed off by the board, the minutes become the formal, legal, record of the meeting, so they need to be accurate and complete. This will be important if there is ever an argument over what the board did or didn’t do. I’ve provided expert evidence in several court cases. In almost every case it would have helped everyone if the board minutes had been more comprehensive, clearer about the board’s decisions, and written with greater care. In some instances, well written minutes might even have prevented legal action from going ahead. If you doubt me, take a look at the Report of the recent Australian Royal Commission on Misconduct in the Finance Industry: if something’s not in the minutes, it may as well not have happened.
- The minutes should capture not only the decisions the board made, but also the options the directors considered and why they made the choices they did. If you ever find yourself in Court, you may need to demonstrate that you applied the care and diligence required of a director and that you believed in good faith the decision you took was in the best interests of the company. The minutes need to record in at least some detail the board’s discussion and the main questions asked – the implication I took from the Royal Commission was that the minutes should record every material question and answer.
- Quite often, we refer to our minutes several months or years later – sometimes to ask ourselves why we reached a particular decision. Minutes showing only that we made a particular decision aren’t much help … we know that, which is why we find ourselves in the situation we do. What’s helpful, therefore, is knowing why, at the time, the board thought it was the best decision.
- In general, the minutes shouldn’t refer to directors by name: ‘the board asked,’ ‘directors discussed’ is usually enough: it’s consistent with the principle of collective responsibility. It also avoids deterring a director from asking what they might think is a contentious or stupid question – with their name against it for all time. Occasionally, a director may ask to be recorded by name, but usually when they’re dissenting and voting against a resolution.
- In a similar vein, our minutes often refer to members of management by name. Nothing particularly wrong with that, except that things change with time. If you refer to the minutes several years later, a manager may have changed roles since the meeting. I prefer therefore to refer to managers by their title, such as CFO (Chief Financial Officer), to avoid any confusion. Of course, the list of attendees at the start of the minutes will show their name and the position they held.
- Finally, directors should be able to review the draft minutes while the meeting is fresh in their minds – while they can recall the discussion and tone of the meeting, as well as what was actually decided. As chair, I like the draft to come to me within four or five working days, and I’ll try to turn them around, with any edits, within a couple of days. (As board secretaries I’ve worked with will tell you, I don’t always meet this standard, but they’re usually polite enough to send me a gentle nudge if I haven’t responded.) Then the draft can go to the rest of the board for their review, preferably within a week of the meeting.
I hope that’s prompted a few ideas to get you thinking about your own board minutes. You may not agree with everything I’ve said, but these principles have generally worked for me. Good luck in your next meeting – and in coaching your minutes secretary!