Meeting Management

Practical governance: seven steps to preparing effective board meeting minutes

Writing board minutes is a central responsibility for all company secretaries. But there’s more to good minutes than meets the eye. From experienced governance practitioners to newcomers, taking effective minutes takes time, practice and skill.

Effective board minutes are much more – and yet much less – than a record of who said what.

Minutes stand as the single source of truth of what took place behind the closed doors of the boardroom. They are a source of authority, a catalyst for action, a statutory obligation and, potentially, legal evidence. It’s crucial that they can withstand scrutiny.

Board meeting minutes – a growing burden for company secretaries

As directors’ corporate responsibilities continue to rise, the demands on company secretaries to produce minutes quickly and accurately is growing. Research from the Institute of Chartered Secretaries and Administrators (ICSA) found that it can take experienced company secretaries between two and three times the length of the original meeting to draft the minutes. Once the minutes have been drafted, the process to review, edit and circulate them ahead of seeking approval can be cumbersome and time-consuming, further adding to the workload.

So, what are the essential elements that must be included in the minutes of a board meeting, and how can corporate governance software reduce the burden? Following these seven steps can ease the squeeze on company secretaries and help improve minute-taking practices.

Step 1. It’s all in the preparation

The foundation for a good set of minutes is built long before directors sit down around the boardroom table.

Effective minutes begin with effective board reports. Each report should clearly indicate what directors are being asked to do, whether that is make a decision, provide guidance and input, or simply note the report.

When a decision is sought from the board, the accompanying report should set out the exact wording of the proposed resolutions.

Step 2. Capture the preliminaries

The style of meeting minutes varies depending on the organisation, the sector and the chair’s preferences. However, they share common key elements that can be captured in a template approach ahead of the meeting to help save time.

All minutes should include preliminary information such as the date, time and location of the meeting. When the meeting opens, the company secretary should note who is in attendance and record any apologies for absence received from directors. The minutes should also show who attended remotely, by phone or video, and when participants attended part of the meeting.

Company secretarial software can draw this information automatically into a meeting minute template, reducing time and effort.

Need to take better board meeting minutes? Use this meeting minutes kit to make sure you are prepared for your next meeting.

Step 3. The agenda sets the foundation

The minutes should present an accurate record of the meeting that could be understood by somebody who did not attend. This begins with a clear and logical structure that connects to the meeting agenda.

This can be set up in advance by preparing a meeting template with headings for each agenda item – something that can be done automatically using meeting minute software. Once the structure is in place, it is straightforward to record the relevant minutes in the right location, so they flow correctly. Make sure to adjust for any items considered out of sequence if that occurs from time to time.

Step 4. The heart of the matter

It’s important to consider how much detail should be included in the meeting minutes. They should stop far short of a transcript of the discussion but need to capture enough detail to demonstrate directors have acted with care and diligence.

The minutes should record enough information to show why the board reached a decision on significant matters. This has become more important in recent years, with minutes used as evidence in legal proceedings where governance and compliance issues have been raised. As a result, the level of detail included in the minutes has tended to grow over time.

It’s the responsibility of the company secretary to strike a balance between sufficient detail and necessary brevity, which may not be the same for each agenda item. Some matters warrant greater detail while for others, restraint may be more appropriate.

At the end of each agenda item, it is good practice to use a consistent phrase introducing the final decision or outcome. This acts as a useful signpost for readers and assists with the flow of the minutes. If the discussion has been wide-ranging and technical, it can be helpful at this point for the chair to sum up their understanding of the discussion and articulate the decision. The chair’s words form the basis of the minuted decision if this diverges from the proposed resolutions set out in the report.

Step 5. Dealing with dissent and naming names

Formal dissent among directors must be reflected in the minutes. This is particularly important in the case of any future review of board performance on an issue that was discussed. The company secretary should clarify with a director whether they wish their disagreement with the decision to be formally minuted. In some cases, they may be satisfied to have voiced their reservations without putting them on the record.

A related issue is whether to name individual directors in meeting minutes. In Australian boardrooms, common practice follows the convention that the minutes reflect the board’s collective authority and do not attribute questions or comments to individuals. However, ICSA’s recent review has found that international practice is changing because of increasing focus on demonstrating director engagement and effectiveness.

Directors’ interests are one situation where naming names is necessary. If a conflict of interest means that a director cannot take part in discussing or voting on a particular agenda item, the minutes should record when they left the room and the point at which they returned. Alternatively, if the board permits a director to participate notwithstanding their interest in a matter, this should also be reflected in the minutes.

Step 6. After the meeting – drafting timely minutes

Once the meeting concludes, the company secretary needs to complete the minutes and circulate them for review. Many organisations have a two-stage review process, with the CEO reviewing the draft minutes before they are sent to the chair and other directors.

Ideally, the minutes should be completed while the meeting is fresh in the minds of attendees. If the meeting notes have been entered directly into corporate governance software, the timeframe to produce the draft minutes can be significantly condensed, as they can easily by exported to Microsoft Word.

In any case, minutes need to be completed within one month as required under the Corporations Act. A longer period is permitted for the minutes to be approved and signed, but this should still take place within a ‘reasonable time’. Corporate governance software can also help keep the minutes book in electronic form, providing greater security and convenient search functionality than downloaded copies or printed pages.

Step 7. The next steps – assigning actions and following up

While effective board reporting anticipates many of directors’ questions, some requests for further information and action will always arise. Action items – sometimes called ‘matters arising’ must be recorded as part of the relevant agenda item and assigned to the relevant person.

Meeting minute software can save company secretaries time by assigning actions to meeting participants with one click. It notifies them automatically and can also send further digital reminders if necessary. This can reduce a last-minute rush to follow up and address action items in the lead-up to meetings.

Making a difference with technology

With the burden on company secretaries increasing, taking advantage of automated meeting minute software saves time and streamlines the process from start to finish. Software supports efficient preparation of concise, accurate and well-presented minutes that record the process by which important board decisions are made.

Discover how Diligent’s Minutes module can make minutes work harder for you and your board. Request a demonstration of Diligent Minutes today.

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