Board Meetings are normal for any company. Some companies hold board meetings monthly, while others hold them quarterly. Whatever your schedule, each board meeting should be well documented. Minutes are considered legal documents by the auditors, IRS and courts, and they represent the actions of the board. Many assert that if it’s not in the minutes, it didn’t happen.
Why keep good minutes?
- To establish a general reporting practice for the corporation and its board of directors.
- To ensure the corporation has the appropriate documentation for subsequent actions and documents.
- To ensure general operations practices are agreed upon and updated as appropriate.
Below is a suggested approach when looking at the Board Meeting Minutes Template (insert link). The template encourages your board to keep the essential informational elements of the meeting as well as the decisions made.
In general, the philosophy among most VC-backed companies – promulgated by the law firms for these companies – is to keep the board minutes “light.” They should cover the substance of the meeting and have any specific votes, option grants, or board level issues documented, but they should not contain extensive details about the presentations given in the board meeting. There is no standardized level of content and format for board minutes. To the courts, the reasoning behind the decisions made are as important as the decisions themselves. Therefore, sufficient information should be included to describe how board members reasonably came to their decisions.
Include the name of the organization, date and time of meeting, who called it to order, who attended and if there is a quorum, all motions made, any conflicts of interest or abstainments from voting, when the meeting ended and who generated the minutes.
The secretary of the board usually takes minutes during meetings. Written minutes are distributed to board members before each meeting for member’s review. Minutes for the previous meeting should be reviewed at the very start of the next meeting. Any changes should be amended to the minutes and a new version submitted before the next meeting where the new version is reviewed to be accepted. Minutes should be retained in a manual and shared with all board members.