Directors’ Meeting Minutes: Why Are They So Important?
What is required of directors’ meeting minutes?
Meetings of directors are to be kept and must contain at least:
- All resolutions passed at meetings (these need to be sequentially numbered and dated), and
- Any declarations of conflicts of interest.
The Act also requires that directors understand the issues facing the company and take time to formulate their own, independent views, so they can actively contribute at directors meetings. The minutes should also reflect this.
Adequate control is to be exercised over minutes to ensure they are a fair reflection of the meeting. They should be circulated amongst the directors to prevent any omissions or misleading statements. As illustrated by recent revelations on State Owned Companies, this is a vital point to prevent malfeasance and ensure directors act only in the best interests of the company.
The golden rules of good minutes
Like a good newspaper article, minutes should follow the 5 Ws:
- Who? The names of the attendees and who sent apologies;
- What? What actually happened at the meeting, how the agenda was followed, the decisions that were made and significant events that had a bearing on these decisions. As someone said – it should not be a ball by ball commentary but must contain sufficient information to capture the essence of the meeting.
- Where? The minutes are kept by the company secretary or one of the directors and secured in a safe place.
- When? Minutes should be done timeously after meetings and circulated amongst the board whilst the meeting is fresh in the minds of the directors.
- Why? Directors’ minutes go to the heart of the business. They are the most important recordings of how and why decisions were taken. Take due care in recording them.
Provided by Anovate Financial Services CC
© DotNews. All Rights Reserved.