Even lawyers disagree about the correct answer to question that they hear often from members of the board of directors of companies they serve: What minutes should look like and how detailed should they be?
Executive SummaryWhat should director minutes say and how detailed should they be? It likely depends on the maturity of the company, the personality of its management and the input of its lawyers, according to Stephen Honig, a partner for Duane Morris LLP, who reviews the considerations in conjunction with the ground rules set forth in the NACD "Directors' Guide."
Last month, the National Association of Corporate Directors took a stab at identifying ground rules in its “Directors’ Guide” to corporate board and committee minutes. The guide is, well, just that—a guide. There are no bright-line answers, but many “it depends.”
The range of answers depends not only on the input of its lawyers, but also on the maturity of the company and the personality of its management.Increasing Scale Means Increasing Danger
In small or emerging entities, minutes tend to be drafted by management, or sometimes even by a trusted office employee. The minute book may not even reflect legally required annual meetings, and rather may consist solely of those things mandated by external relationships: a vote authorizing a lease or a bank account, or an application for some governmental permit.