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What is a unanimous consent board meeting resolution?

July 22, 2019
0 min read
Someone holding a pen reviewing unanimous consent board meeting resolution

Various corporate issues come up on a regular basis that require a unanimous consent board meeting resolution from the board of directors. Most of the time, the board chair can put them on the agenda and wait until the next regularly scheduled board meeting to address them. Unfortunately, some issues are of such a timely matter that they simply can't wait until a board meeting that may be months down the road. A unanimous consent board meeting resolution is also known as unanimous consent or unanimous written consent. The unanimous consent process is designed for boards to be able to quickly and conveniently approve board matters without having to round up the board directors, ensure they have a quorum and hold a formal vote.

In the interest of efficiency, boards have needed to find ways to streamline some of their processes. In past decades, when boards have needed timely approvals for certain matters, they've had to hunt down the entire board, deliver scanned copies of signature pages, and have them sign and return the pages within a certain time frame. At its best, this process was only effective if the directors were in a location where they could access a printer and a scanner. For most board chairs and secretaries, this is a time-consuming and frustrating endeavor.

The unanimous consent process still works well. Modern governance processes make it work even better. Regardless of how boards go about processing unanimous consents, they still need to know what the rules, laws and regulations are to approve them legally.

What Types of Situations Call for Unanimous Board Meeting Resolution Consent?

Any number of issues can present themselves that require a board of directors' approval. State corporate laws require board consent for certain transactions and situations. For example, boards have to give unanimous consent when they issue shares of stock.

The company's charter or other governing documents usually outline the types of actions that boards have to approve such as the investor rights agreement and operational matters. A third party may require board approval when they're a party to a significant contract.

The unanimous consent process is appropriate when the board needs to give formal approval for corporate actions on a rush basis.

Let's take the example of a financial transaction. The board has been working on the deal for a long time. They've been told that the closing date is looming, but currently, the closing date hasn't been set. The board has had lots of time to discuss that matter and they're in agreement on the terms of the transaction. The board needs to move on the issue on the closing day. It's not something that can wait until their next board meeting. Yet, it's difficult to schedule a special board meeting or board call to get a consensus at the last minute.

Written consent is the best way for the board to give final approval when the deal documents are completed, and the package is ready for stockholder approval.

When Can You Use Unanimous Written Consent?

It's not appropriate to use unanimous board meeting consent for just any matter that needs board approval. If the matter has an obvious consensus and everyone agrees, the board chair doesn't need to verify a quorum and the board doesn't have to meet in person.

The board can use unanimous consent for routine matters that don't require board approval or for more significant events that the board has previously discussed and agreed on. Unanimous consent doesn't replace regular board meetings. Boards can also approve unanimous consent resolutions during board meetings to expedite the meeting and allow for extra time to discuss more important matters.

For a unanimous written consent to be legal, boards have to follow all the rules and regulations. The company or organization's bylaws should state that the board directors can make approvals this way.

Unanimous consents can be approved with a prior effective date as long as the state government allows it. As a best practice, boards should be sure to add wording to the resolution that makes it clear that the consent is effective no earlier than the date the last director approves it.

How to Write a Unanimous Consent Board Meeting Resolution

Some of the things that need to be included in a unanimous written consent are the exact wording of the board meeting consent resolution or agreement. The agreement may be sent via email with updates from the last discussion or have marked copies with red lines showing the changes. The wording should also include sufficient information to allow the board directors to make an informed judgment.

Unanimous written consent may take the form of an email message with the following words in the subject line: 'Email-vote Yes Electronic Approval.' The unanimous consent only becomes effective when all directors have given their consent.

Unanimous consents should be noted in board meeting minutes. They can be recorded electronically or manually on paper if that's how the company normally keeps them.

Board Management Software Streamlines Process for Unanimous Consents

Diligent Corporation's Voting and Resolution software was designed for modern governance. The program fully integrates with Diligent Boards, Diligent Messenger and a suite of other software programs that comprise Governance Cloud.

The Voting and Resolution software affords board secretaries or board administrators the ability to customize the type of voting, including yes/no votes or for/against/abstain votes with or without signatures. This is an important feature because the answers that board directors need to give for a unanimous consent agreement must be clear and unambiguous to be considered legal.

The Voting and Resolution tool also has a Quick Voting feature, which is perfect for voting on unanimous consents. The program will even send out notifications when the votes are available. As each director places their 'yes' vote, the program timestamps their vote.

For other types of votes, the program allows board directors to vote anonymously and to add comments if they so desire. Convenience is important for board directors, so Diligent created the iPhone app so board directors can vote from anywhere using their mobile phones.

With Diligent's board management software programs, boards can easily create unanimous consents, notify board directors that they need to cast a vote, register the votes in real time and get signatures on approvals in a very short period. Diligent's Voting and Resolution digital tool is an example of modern governance at its best.


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