Board resolutions: A complete guide to writing one (free template included)
Resolution is a form of the word resolve, which means to settle or find a solution to a problem, dispute or contentious matter, or decide firmly on a course of action. Board resolutions are exactly that: a tool boards use to document important actions or policies.
The board is the governing authority responsible for making major decisions about the current and future state of the corporation. As such, boards need an avenue for making formal and legally binding decisions that can change the corporation’s trajectory. Board resolutions are the answer, but only if you prepare and document them correctly. Here, we’ll explain how to write effective, compliant resolutions, including:
- What a board resolution is, and who signs them
- Common types of board resolutions
- What issues require a board resolution
- How to write, pass and store board resolutions
What is a board resolution?
Sometimes, boards face pressing or urgent matters that require timely decision-making by the board. In such cases, the board may meet on an emergency basis to vote on an issue that can’t wait until the next regular meeting. These decisions are called board resolutions.
A good summation of a board resolution is that it’s a formal document that identifies the roles of the corporate officers along with their board meeting decisions and results. Resolutions must be certified to be legal, meaning that the board secretary, assistant secretary or other designated person verifies the resolution and certifies it by having the board president sign the resolution. Certified resolutions document and preserve the board’s vote in writing, which is essential because the resolution typically authorizes a committee or person to take action on the matter.
The resolution then becomes part of the company’s record and is legally binding. For this reason, boards should document meeting resolutions in their meeting minutes and store them in their board portal.
Who signs board resolutions?
Multiple board members may sign the resolution, especially if the matter requires their specific approval. However, most board resolutions are only signed by two individuals:
- Chairperson of the board: The board chair will sign the resolution to affirm that the board approved it.
- Corporate secretary: The secretary will sign the resolution to attest that it’s been adopted and recorded in the board meeting minutes.
Tone setting for governance
Get the key strategies and tools corporate secretaries can use to help the board prepare for anything and everything.
Discover moreWhen are board resolutions required?
There is no hard and fast set of circumstances that require a board resolution. Boards have much flexibility in deciding when to preserve a vote through a resolution. One of the most common situations that calls for a board resolution is when a new director gets voted onto the board. Board resolutions can also be written for any other important matter.
Board resolutions can be helpful when:
- Expanding the company
- Hiring or laying off a significant number of workers
- Selling additional shares of the company
- Purchasing intellectual property rights
- Fire, terminate or lay off executives
- Determine whether to distribute corporate dividends
- Support executive duties
- Assist with branding goals
- Document shareholder decisions
The company may need a resolution before making any major decision that materially affects it. Boards can then use them internally, share them with shareholders on request or provide them to entities like banks, brokerage firms or asset managers. Resolutions also provide proof of compliance when a regulatory or legal authority needs to verify the choices that the shareholders or board directors make.
Types of board resolutions
Board resolutions fall into several categories depending on the decision or action the board needs to take. Most resolutions are:
- Ordinary resolutions: Boards can address routine matters using ordinary resolutions. These call for a simple majority vote and are often used to approve annual financial statements or make minor policy changes.
- Special resolutions: More significant matters often call for a special resolution, which typically requires a supermajority vote. A board might use a special resolution to amend the bylaws or introduce a corporate restructuring.
- Unanimous written resolution: These resolutions apply if all board members agree to the decision outside of a formal meeting, making them particularly useful for urgent issues. In that case, all directors will sign the resolution.
- Circulating resolutions: A board member drafts a circulating resolution and distributes it to other board members between scheduled meetings. The resolution passes once enough members have signed.
- Elective resolutions: Company bylaws often include elective matters, like decisions on share capital or buybacks, which require an elective resolution.
How to write board resolutions
Because board resolutions are legal documents, writing them should follow a structured process. To write a board resolution, include:
- Title: Use the title to state that the document is a resolution clearly.
- Date: This should be the date the resolution is being proposed.
- Resolution Number: Give the resolution a unique identifier according to your record-keeping system.
- Preamble: Include a brief introductory text explaining the resolution's purpose. Include any relevant background information or reasons why the resolution is essential.
- Resolution statement: Clearly state the action or decision in question. Be concise.
- Authorization: Identify the approved signatories, often the board chair and the corporate secretary.
- Effective date: List the date the resolution becomes effective.
- Signatures: Create spaces for relevant board members or officers to sign.
- Certification: If needed, include a certification for the corporate secretary to attest that the resolution was approved.
How to pass board resolutions
Like writing the resolution, there’s also a formal process to pass it. Following this process ensures the decision becomes legally binding and properly documented.
- Notice of meeting: Notify board members about the meeting, including the date, time, location and agenda.
- Prepare the resolution: Draft the resolution using the template below. Distribute it to all board members before the meeting.
- Convene the meeting: Gather for the meeting and ensure a quorum is present.
- Present the resolution: Propose the resolution to board members, explaining necessary information or details. Make time for discussion and questions.
- Move to adopt: A board member should move to adopt the resolution. Another board member should second the motion.
- Discuss the resolution: Board members can now openly discuss any concerns or questions about the resolution and suggest amendments.
- Vote: Hold a vote according to the organization’s bylaws. This could be a show of hands, a voice vote or a written ballot.
- Record the resolution: The corporate secretary should include the vote results in the meeting minutes.
- Collect signatures: Appropriate officers should sign the resolution to verify the vote.
- Implement the resolution: Authorized individuals or committees can now take action related to the resolution, from making financial transactions to signing covered documents.
Storing board resolutions
The significance of board resolutions requires that board directors keep them safe and secure. Boards typically store board resolutions and the sample board resolution with the rest of their bookkeeping records. Resolutions should motivate boards to have backup copies. Paper resolutions may be subject to theft or destruction by natural disasters like fire, flood, earthquake or tornado.
Board management software systems, such as Diligent Boards, part of the Diligent One Platform, provide the safest storage system for corporate boards. The system offers high-level security using unlimited, cloud-based storage. The board portal provides a secure, online document storage system to preserve founding governance documents, board resolutions and other documents for the corporation’s life.
Diligent Boards is also home to the Voting & Resolutions tool. It allows for:
- One-click “for” or “against” voting
- Voting “yes,” “no,” or “abstain” from the vote without requiring board director signatures
- Leaving remarks in the comment box to explain votes when necessary
- Tallying results automatically to provide a real-time summary of the voting
- Apply director signatures electronically across multiple board resolutions
- Writing, voting and certifying board resolutions using a highly secure platform
Simplify board decision-making
Ease the burden of board resolutions and other approval processes with all-in-one board voting software.
Discover moreSample of board resolution
Board resolutions may be long or short, depending on the nature of the resolution. It is crucial to identify the issue that the board voted on, the names and roles of those who voted, the results and the final certification.
Here is a sample of a very basic board resolution:
Board resolution template
BOARD RESOLUTION
At the meeting of the Board of Directors of (employment service organization) on (date of meeting), the following resolution was proposed and approved by the board: Resolved: WHEREAS the mission of the (employment service organization) is (describe mission); WHEREAS (describe project or business unit) supports the mission of (employment service organization); That the (employment service organization) Board is in full support of a grant proposal to the Virginia Department of Rehabilitative Services for (describe project).
(Names and roles of those who voted)
Signed: (President) or (Chairman)
(certification or official stamp)
Compliance and record-keeping best practices for board resolutions
Board resolutions are an essential decision-making mechanism for boards. However, proper handling maintains your board’s legal standing and demonstrates good governance. Here are some best practices to follow:
- Keep resolutions within the minutes: Record resolutions in the official meeting minutes. You can write them into the minutes directly or attach them as a separate document. Either way, resolutions must be part of the permanent record.
- Follow a clear retention policy: Board resolutions are critical documents and, as such, should be retained indefinitely. Establish a retention policy that ensures you store resolutions so they are secure and retrievable, even years later.
- Be clear on electronic versus wet signatures: Many boards accept electronic signatures under e-signature laws like the E-Sign Act and the Uniform Electronic Transaction Act (UETA). However, some situations, like banking resolutions, may still require original ink signatures. Know your legal and regulatory requirements before choosing a method.
- Use a board portal for secure storage and access: A secure board portal organizes your resolutions and minutes while ensuring they are encrypted, backed up and accessible only to authorized users. This reduces risks tied to lost documents or unauthorized access.
- Standardize the resolution format: Using a consistent structure like the template above makes it easier for current and future board members — and third parties like auditors — to understand and verify decisions quickly.
- Ensure resolutions are specific and unambiguous: Vague resolutions can create confusion or legal risk later. Ensure the language clearly spells out what is being authorized, including any conditions and who is responsible for implementation.
- Review and update board resolution templates regularly: Corporate governance laws and best practices evolve. Periodically reviewing your templates ensures you comply with changing legal requirements or industry standards.
Turn board resolutions into a tool for strategic action
Boards of directors make many vital decisions while serving on the board. They must document those decisions in writing and preserve them as needed. Board management software expedites writing board resolutions without compromising compliance or quality. Diligent Boards, part of the Diligent One Platform offers all of the tools for streamlining voting procedures and securely storing and preserving important documents to retrieve them quickly and easily when boards need them.
FAQs
Are board resolutions legally binding?
Yes. Board resolutions are legally binding documents that record official decisions made by boards of directors. Once passed, they carry the board's authority and can be enforced as part of the organization’s governance. Properly documented resolutions demonstrate that the board acted within its legal authority and followed due process.
Do board members need to sign all resolutions?
Not always. In most cases, resolutions are approved by a vote during a board meeting and are recorded in the meeting minutes, which are then signed by the board secretary or an authorized officer. However, for major actions, like a merger or contract, some organizations require individual board member signatures or use unanimous written consent to formalize approval.
Can a resolution be passed without a meeting?
Yes, in many jurisdictions and under many bylaws, a board can pass a resolution without holding a formal meeting by using unanimous written consent. All board members must agree in writing to the resolution for it to be valid. This helps boards act quickly when urgent decisions are needed between scheduled meetings.
What’s the difference between a board resolution and meeting minutes?
Board resolutions are specific, formal statements that document the board’s decision on a particular matter — for example, “Resolved, that Jane Doe is elected to the board of directors.” Meeting minutes are comprehensive summaries of everything discussed and decided during a board meeting, including but not limited to the resolutions passed. Think of resolutions as the official “action items” within the broader narrative of the minutes.
