A Guide to Board Minutes

Taking board minutes is a legal requirement under the Companies Act.

To a large extent board minutes are standardised and follow a set format.

They are important documents of record for each company, and company directors and secretaries, therefore, need to ensure that they are tailored to the company they represent and the issue(s) being minuted.

This guide aims to give you an overview of the key principles that guide the drafting of board minutes, the content that should be included within well-drafted board minutes and the requirements for their retention.

 

What are Minutes?

 

Minutes are a formal record of a company’s meetings and decisions.

They serve as an official record of all business meetings and Board discussions.

They prove that management is fulfilling their promised duties, as well as documenting that directors are acting in the best interest of the company by maintaining a record of their decisions and the discussions leading up to such choices.

Every company is required to take minutes of:

• All appointments of officers made by its directors
• The names of the directors present at each meeting of its directors
• All resolutions and proceedings at all meetings of its directors

Our memories of meetings can be faulty, whether due to our own biases and agendas or simply because, as people, we are prone to forgetting details – meeting minutes help fill in the gaps and act as an objective guide of what really occurred in the Boardroom.

Minutes of board meetings form part of the company’s records and can be held as hard copies or in electronic format – but must be capable of being reproduced in hard copy form.

They are a permanent record.

The company decides who will keep the minutes of meetings and where the minutes are kept.

As regards sole directors, the Companies Act does not specifically refer to their situation, as usually, a meeting consists of more than one person.

However, it is considered best practice for a sole director to record their decisions in writing.

You should also check your company’s constitution for any specific requirements in relation to board minutes, directors’ resolutions, and the retention of board minutes.

Every company must conduct its board meetings in accordance with its constitution.

 

Responsibility

 

It is the general view that the company secretary is responsible to the chairperson for the preparation and retention of board minutes.

The chair and the other directors are subsequently responsible for confirming their accuracy.

As not all private companies will have a company secretary, it is important that the responsibility for drafting board minutes is conferred on an individual with the necessary skills in company secretarial processes and procedures and company administration.

This may be a company director or a company administrator.

As the preparation and production of board minutes is more than an administrative formality, companies should employ a properly qualified individual with the necessary skills to take minutes.

 

Purpose

 

Board minutes should provide a formal, accurate, impartial, long-term internal record of the company’s board meetings for the benefit of the company itself rather than for third parties.

Ultimately board minutes should provide evidence that the meeting was held and what business was conducted.

They must accurately record all resolutions and decisions made at the relevant board meeting and demonstrate that board members have observed their responsibilities to the company and complied with their legal and regulatory duties in making those decisions.

The other key purpose of board minutes is to keep a record of declarations of interest made by directors and any authorisation of directors’ conflicts by the board.

More information on directors’ conflicts is available here.

 

Writing effective minutes

 

There are many factors to consider when creating effective meeting minutes.

Most often, these will depend on your industry and the specifics of your organisation.

However, some broad aspects of meeting minutes are also essential, no matter the size and style of your company. 

The three basic elements of creating effective meeting minutes are formatting, attendance, and content.

These three elements are crucial as they protect against liability, evidence decisions, and provide a clear list of the actions planned within the meeting.

It is important that your minutes contain some form of these three elements.

 

Format

 

In their most basic form, meeting minutes should begin with an official header, outlining the date, time, place, and type of meeting.

If you have time and the resources available, you may choose to include your organisation’s logo and branding, a statement about confidentiality/security, or notations that are particular to your company.

These can all help take your minutes to the next level.

Whatever you choose to include, be sure to use the same format consistently for all the meeting minutes you create.

 

Attendance

 

Attendance may seem like an obvious thing to include within meeting minutes and hardly worth commenting on, but documenting attendance isn’t just an administrative exercise; it can have real legal implications in the future.

Keeping a record of who and who was not present in a meeting makes clear who weighed in when decisions were made and who was unaware or excluded.

If your company falls under legal questioning at a later date, this kind of record can serve as evidence within the case.

Accurate attendance records are also important from a tracking perspective internal to the company.

It can help you determine who is truly invested and who has perhaps fallen victim to overboarding (i.e. sitting on an excessive number of boards).

Investors and/or other stakeholders may also be interested in attendance to verify that their representatives are attending and contributing as they say they are.

Your attendance record can be simple, but you should be sure to include the names of both those who were present and those who were absent.

Be sure to note as well if anyone is participating remotely.

Job titles may be included – the more robust the corporate record, the easier it will be when someone requests research into the historical board records – but these are not essential.

You may bridge the attendance section of the meeting minutes and the body record with an Opening Meeting paragraph that notes the time the meeting begins, the person in the Chair, and the person taking minutes.

These again can help establish best practices being followed or errors on the company’s part, should legal matters arise, and should as such be recorded with care.

 

Content

 

Board minutes are a record of the meeting and should document the reasons for a decision and include enough background information for future reference.

Board minutes will usually follow the following format:

1. Preliminary information

• Company name and number;
• Date, time and venue;
• How it was held (in person, by telephone etc);
• Names of directors present;
• Apologies;
• Name of chairperson;
• Names of others in attendance (alternate directors, company secretary etc);
• Whether a quorum is present;
• Whether enough notice has been given for the meeting.

2. Approval of Prior Minutes

• Some companies will approve a draft of the company’s previous minutes. This may be in relation to a company’s regular monthly or quarterly meetings of the board to discuss on-going matters.
• Matters arising from previous minutes may also be tabled and discussed.

3. Conflicts of Interest

• Declarations of any conflicts or authorisations of directors’ conflicts.

4. Items discussed

• the reason for the meeting and reference to any papers presented to the meeting. This may be decisions about the day-to-day management of the company, or it may be for a specific purpose, for example the directors wish to declare and pay a final dividend and they need to recommend this and confirm that there are sufficient distributable reserves for the company to do so etc;
• the text of any board resolution and a record of whether it was passed (note that the model articles require every unanimous or majority decision taken by the directors to be included in the minutes);
• the text of any resolutions that are proposed and require shareholder consent; and
• that the meeting was adjourned so that a resolution could be sent to the shareholders and a record of how the resolution was passed by the shareholders (general meeting or written resolution).

5. Instructions as to filing etc

• Any instructions to the company secretary or company administrator as regards the execution of documents, the writing up of statutory books and the filing of relevant forms with Companies House.

6. Close of Meeting

• The meeting will then be closed. If this is a regular meeting of the company, the date of the next meeting may also be included.

The draft minutes should be agreed upon with the chairperson and then should be circulated to other directors for comment as soon as possible after the meeting.

The Board minutes will then be signed by the Chairperson.

Once they have been signed, they should not be altered in any circumstances, including to correct any typographical errors.

The correct way to amend or rescind them is by a resolution of the board and minuting the original error.

 

Notice

 

Unless you’ve amended your constitution (the rule book for any company) to state otherwise, notice of a board meeting must be given to every director (even those who have already said they won’t be able to attend) unless the directors resolve otherwise.

Formal notice of specific meetings need not be given where meetings of directors are held at stated periods, for example, on a particular day in every week or every month.   

There is no prescribed notice period for board meetings in the Companies Act.  

However, your constitution may contain a minimum notice period, but if it doesn’t, the notice period should be fair and reasonable.

What is reasonable will depend on factors like:

• The significance of what is being considered
• How urgent the matter is
• The practice of the board

It is usually a good idea to send any notice in writing so that the detail is properly recorded and you can avoid ambiguity or misunderstandings.

As a minimum, the notice should set out where and when the meeting will be held.

There is no general legal requirement that a notice must state the business to be discussed.

However, as a matter of good practice the notice should contain an agenda of matters to be discussed.

 

Inspection/Access to minutes

 

Minutes of board meetings are internal records of the company.

Directors (whilst in office and for a proper purpose) have a right to inspect the company’s books and records.

This will include the board minutes.

Shareholders, however, have no legal right to see board minutes.

Auditors have a right to inspect the company’s board minutes as part of their audit process.

Insolvency officeholders, such as liquidators, administrators and administrative receivers, are also entitled to inspect board minutes.

 

Retention

 

A company must retain minutes of board meetings for the life of the company plus:

• 6 years (if dissolved by way of liquidation)
• 20 years (if dissolved by way of strike-off).

The minutes may be kept in hard copy or in electronic form (provided the electronic copy is capable of being reproduced in hard copy form).

The company’s constitution may include further provisions as far as retention is concerned and so should be checked for any further requirements.

PLUGGED has a suite of templates for you to choose from to help you Minute various types of meetings.

Board minutes (general)

Board minutes (general) – sole director

Board minutes – removal of a director

Board minutes – purchase of a company

Board minutes – declare directors’ interests

Board minutes – consider directors loan and call