In the third of his series on Board minutes, Tim Banks
invites us to “Keep the Purposes Front and Centre”. He identifies one of the purposes being the
litigation perspective of ensuring that the minutes provide evidence of how
directors fulfilled their duties. I
would add that one may have also to consider the perspective of satisfying regulators,
depending on your industry. He further
postulates that the minutes need to be a record of the board’s decision-making
process and provide compelling documentary evidence to support the application
of the business judgment rule. Mr. Banks
then goes on to consider how the purposes affect the content. He sets out a range of items which in his
opinion should be recorded. I think this
should be tempered by not repeating what is contained in briefing materials the
board has received, although the minutes should contain reference to those
briefing materials so that they are in effect incorporated by reference into
the minutes. I agree that the minutes
should not be a verbatim transcript. He
advises that they should be a “high-level summary of the matters discussed”. My guide is that the minutes be a record of
the material aspects of the Board’s deliberations
on material issues. This article is definitely
worth reading.
