Far from minute taking being merely an administrative task, meeting minutes are an important record of the discussions, decisions, actions and responsibilities that are agreed upon when the board convenes. They are a pillar of evidence of good governance and serve to demonstrate that directors are actively engaged and focused on performing their fiduciary duties. Board meeting minutes form part of the corporate record and can be cited in court in the event of a legal dispute involving the company or its directors. Thus, it’s important that they are of a clarity and quality that can stand up to scrutiny.
The Department for Education is just one recent example where inaccurate or incomplete board minutes have been publicly criticised and offered as evidence of poor overall governance. The DfE published minutes that included “some updates amounting to no more than a ten-word sentence” which, said critics, showed the department’s lack of transparency.
Organisations can be compelled to release board meeting minutes as part of Freedom of Information (FOI) requests by members of the public or the press, as happened in the case of the DfE. It’s clear, therefore, that the regularity with which board minutes find their way into the public domain means that it is a matter of sound governance to ensure that they can be accessed when needed and are fit for purpose.
So, what are the legal requirements for board meeting minutes in the UK and how can technology be leveraged to make sure that they are an available, accurate record and provide sufficient evidence of the board’s activities?
The legal position – record and retain
In fact, there is relatively little legislative detail on the subject of board meeting minutes. Section 248 of the Companies Act 2006 simply states that minutes must be taken at all board meetings and retained for a minimum of 10 years. Beyond this statutory requirement, there is an understanding that minutes should form an accurate record of the meeting that is agreed upon by all who were present. While they should not be a transcription of the proceedings, minutes must contain sufficient detail to enable an external reviewer to understand the process by which directors arrived at a decision.
The digital filing cabinet and the importance of accessible archives
As stated above, board meeting minutes must be kept for a minimum of 10 years. Until the mid-1990s, storing meeting minutes simply meant putting a copy into a filing cabinet, but the information revolution naturally means that company records are increasingly stored in digital archives. This throws up some interesting issues around document management best practice, security, future accessibility and file integrity. As a minimum:
- Storage of board minutes should be secure and stable. Only those who are authorised should have open access to the files.
- Storage should be centralised; minutes shouldn’t sit on the board administrator’s hard drive.
- Files should be backed up regularly as part of the organisation’s disaster recovery protocol.
Minutes should be accessible to directors for review and reference, as required.
Discover how Diligent’s Minutes module can make your minutes work harder for the board.
There’s a reason that paper was the recording format of choice for thousands of years. It’s easy to come by, it’s relatively stable and you generally only need a pair of eyes to view it. The digital age brings with it a host of challenges when it comes to archiving and accessibility. As file formats and storage systems evolve, organisations must ensure that board meeting minutes are subject to robust archiving procedures so that today’s records can be successfully accessed in the future.
How many meeting minutes, for example, are even now languishing on floppy disks with no device to access them? And if that possibility has you shaking your head, it is worth remembering that legacy technology is a problem that affects more than just company boards: According to the US Government Accountability Office, the US nuclear program was still being run using eight-inch floppy disks until last year.
Leveraging digital transformation to support the boardroom
The days of elegant shorthand are, alas, behind us. The majority of board administrators now input minutes directly into their laptops. This has the natural benefit of speed and eliminates the need to translate shorthand notes and to retype documents.
The next step is to take advantage of board portal solutions that combine the convenience of digital minute taking with centralised, secure storage and shareability. Using templates that automatically draw in agenda items creates an instant structure around the minutes which guarantees logic and readability. It also frees up the board administrator’s time to focus on recording accurate minutes with sufficient detail to satisfy an external reader of the substance and process of discussions. This demonstrates the good governance that anyone scrutinising the minutes will need to see.
Once the minutes have been entered, it is then a swift task to check and edit them and share them with directors for review and clarification. A secure board portal that’s available 24/7 means directors can fulfil their task whenever it suits them. A digital system also allows for the assigning of actions to individuals and committees, with reminders that can help to keep directors engaged and on track.
In this way, digital transformation can empower the boardroom, saving time, increasing accuracy and ensuring that the organisation is prepared should its board minutes come under scrutiny.
Board Portal Buyer’s Guide
With the right Board Portal software, a board can improve corporate governance and efficiency while collaborating in a secure environment. With lots of board portal vendors to choose from, the whitepaper contains the most important questions to ask during your search, divided into five essential categories.
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