Preparation of Board of Directors Meeting Minutes

Pre-Meeting Planning

It's important to plan the structure and content of the board of directors meeting minutes before the board of directors meeting takes place.  While styles of preparing board of directors meeting minutes vary, it is important for the corporate secretary to prepare board of directors meeting minutes consistently from meeting to meeting.  The agenda for each meeting can serve as a guide for the board of directors meeting minutes because the agenda will outline the topics to be discussed during the meeting. The board of directors discussions described in the meeting minutes should follow the topics specified on the meeting agendas.  The board of directors meeting minutes should also include a list of all directors and others who were present at a meeting.

Copious Notes of Meeting Discussions and Decisions

Essential aspects of the board of directors meeting minutes include:

Because the board of directors meeting minutes is the official record of board deliberations and decisions, the corporate secretary should be devoted to taking detailed notes of the discussions at any particular board of directors meeting.  Those copious notes will serve as the basis for the ultimate preparation of the board of directors meeting minutes. It's important to note that courts will presume that the content of the finalized minutes is accurate. Therefore, it's important for the board of directors meeting minutes to be both objective and clear, without any judgmental or characterizing language.

For each issue discussed by the board of directors, the corporate secretary should write a summary that describes the issue discussed, the relevant information that was presented and reviewed, the alternative courses of action considered and the decision made. Alternative positions discussed should be described summarily in a succinct manner and should not be ascribed to particular members of the board of directors.  The board of directors meeting minutes should accurately reflect the decisions that were made by the board of directors so that the minutes can be relied upon in the future.

Expedient Drafting of Minutes ASAP After Meetings Conclude

The best practice is for the corporate secretary to draft board of directors meeting minutes as soon as possible after a board of directors meeting takes place because that is most likely the time when the content of the board of directors meeting will be most accurately remembered and described.  The corporate secretary should ensure that all items on the meeting agenda are covered in the board of directors meeting minutes. It is best practice not to attribute specific statements made during a board of directors meeting to specific directors and to only summarize the content of board of directors’ discussions about any particular topic.  Board of directors meeting minutes should be prepared in a straightforward, clear, concise, and objective manner, using “business-friendly” language, not legalese. Also, only the most important aspects of board of directors discussions should be included.

Board of directors meeting minutes should neither be a transcript of what takes place at board of directors meetings nor a skeletal outline of board of directors’ discussions.  Best practice is to describe routine matters with little detail and more material or important matters with a greater degree of detail, but not too much detail. If a board of directors meeting involves attorney-client privilege protected information, it is important not to include details regarding that information in order to not jeopardize that protection.

Board of directors meeting minutes also should contain the resolutions relating to material matters, such as acquisition, divestiture and financing transactions, which have been approved by the board of directors as well as reference to any executive sessions that took place.  To the degree possible, the form and style of the board of directors meeting minutes should be consistent from meeting to meeting.

Review and Finalization of Draft Minutes

After the corporate secretary prepares an initial draft of the board of directors meeting minutes, he or she should provide the chair of the board and other directors with the opportunity to review and comment on the draft.  This review process might also include the chief executive officer, chief financial officer, and general counsel as well as others who had a role to play in the meeting, being careful not to compromise attorney-client privilege protection aspects of the draft minutes.  The corporate secretary should collect comments from all of the reviewers and incorporate them as best as possible into the final version of the draft minutes. Once that process is completed, all previous drafts and related notes should be destroyed.

The final version should be approved at the next meeting of the board of directors, and the corporate secretary should then sign the board of directors meeting minutes immediately following approval. The approved and signed board of directors meeting minutes becomes the official record of what took place at the relevant board of directors meeting.  The finalized board of directors minutes should be kept in hard copy in the company’s corporate minute book in a secure location, and an electronic backup copy should be maintained on a secure electronic site in case the original minutes are lost or destroyed.

Board of directors meeting minutes should be artfully drafted so that they serve as an accurate record of the board of directors’ decisions and can be used to defend the board of directors against any future lawsuits challenging the exercise of the board of directors’ fiduciary duties or seeking to pierce the company’s “corporate veil”.  Properly prepared board of directors meeting minutes are also important to be able to respond to financial statement and regulatory auditor requests for corporate documentation and for any future transaction due diligence processes. The careful preparation of board of directors meeting minutes is a serious undertaking and very important from litigation mitigation, risk management, and transaction readiness perspectives.

About Paul Marcela, President and Managing Director of Governance Partners Group, LLC

Paul Marcela is an experienced and committed corporate leader with unique diplomacy, advocacy, ambassadorship and international skills and a dedicated professional with a demonstrated ability to accomplish objectives in a corporate environment. His 32 year legal career includes 24 years in the Dow Corning Corporation Law Department where he led the Department’s Business & Finance Section. As Assistant Secretary, Paul led the Company’s Office of the Corporate Secretary. He also served as Vice President, General Counsel & Secretary of two portfolio companies of Cerberus Capital Management.