Keeping proper board minutes is a very important practice for nonprofit organizations. The Board of Directors must have an adequate understanding of the purpose of documenting board minutes, as well as what information to include, in order to make the most of their minutes.
Minutes serve as the company’s permanent, formal record of corporate decisions and actions. Board minutes should adequately document all changes and resolutions agreed to by the board without being unnecessarily detailed or disclosing confidential information. Board minutes may be used to illustrate the company’s compliance to regulations and dedication to its mission, or as a reference for users both inside and apart from the organization. If legal action is ever taken against the organization or an audit is to be conducted, the minutes will likely be one of the first documents requested and reviewed. Minutes can even protect board members from being held liable if they are documented to have voted against a particular resolution which led to litigation being brought against the organization. They serve as important documentation of actions taken by the board as a whole and its individual directors.
Board minutes must include:
- Date, time, and place of the board meeting
- Names of each director in attendance, as well as whether they are physically present or calling in
- Names of absent directors
- Names of guests present at the meeting
- Acknowledgement that the required number of members to make business decisions are present (quorum)
- A statement of the time the meeting was called to order
- Approval of the minutes from the previous meeting
- Decisions and actions taken by the board, with resolutions clearly highlighted
- Record of how each director voted on each resolution, including any directors who abstained from voting
- Any conflicts of interest involving directors and how they were addressed
- Any portion of the meeting considered an executive session
- Advice of counsel or qualified experts which the board relied on in making decisions
- Attachments of any documents of resolutions which were approved or adopted
- Record of the election and term of office of any directors whose term will expire before the next meeting
- Confirmation or arrangements for scheduling the next meeting
- A statement of the time the meeting was adjourned
- The recorded minutes will be submitted by the corporate Secretary for review and approval at the subsequent meeting, then signed and filed in the minute book. The minutes may also include action items which board members commit to, or alternatives considered, for important decisions. Board minutes should always be prepared on a timely basis in order to provide accurate, relevant information. They should be kept in a readable, easy to understand format with a brief narrative description of each action taken.
Board minutes should not include everything discussed by the board. Boards and secretaries must use their best judgement as to how detailed the board minutes need to be. Only useful and relevant information should be included in order to efficiently and effectively compose board minutes. Furthermore, some of the information discussed by the board will be sensitive information which should be kept confidential.
If you have questions regarding your organization’s board minutes, please contact your L&B professional for more information.