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Best practice: keeping minutes of meetings

25 Sep 19

The Governance Institute of Australia (Governance Institute) and the Australian Institute of Company Directors (AICD) have recently collaborated to provide observations in board minute taking practices and have expressed their perspective in a joint statement on board minutes (Joint Statement).

As many charities and NFP’s are structured as companies or have corporate trustees, these principles are relevant to boards and directors of these entities.

The Joint Statement helpfully outlines key principles, record retention policy, and provides opinions on what details should be included in board minutes and carefully considers best practice. It also explores specific issues such as maintaining legal professional privilege, the status of draft notes and how to document dissenting views in minutes.

AICD and the Governance Institute have also obtained counsels’ opinion on particular issues, to add legal context to their conclusions and recommendations. We summarise below some key points and useful tips from the Joint Statement and counsels’ opinion:

What should board minutes include?

  • Minutes should include the key points of discussion and the broad reasons for board decisions. This assists in demonstrating that directors have acted with due care, diligence and in good faith and in the best interests of the organisation.
  • if a decision is required and directors are considering competing risks and considerations in making a judgment, these should be captured in the minutes.
  • significant issues raised with management by directors and the reactions received (e.g. responses received or action promised by management). However, it is not necessary to record every query put and every response received; it would be sufficient to record the thrust of significant issues raised.

What level of detail should be included in board minutes?

  • The level of detail in minutes is subject to the matters being deliberated by the board. Relevant issues to consider when including key points of dialog and rationale for decision include:
    • the decision is important to the operations of the organisation and carries risks which need to be debated;
    • any legal or compliance issues that need to be considered by the board in respect of any decision; and
    • any potential conflict of interest from the management team or the board that may impact any decision.
  • The board makes collective decisions and the details of any debate that occurs need not be recorded in the minutes. It is important to note the difference between a robust discussion that leads to a collective decision by the board, and the dissent of a director in discharging their individual duty to act with care and diligence.
  • Board minutes are not a transcript of the discussions during the meeting, or a record of each director’s input. Less is more in most scenarios so as to promote clarity and healthy debate.
  • Minutes should be clear and concise and written in a way that someone who was not present at the meeting can follow the conclusions reached.

Maintaining legal professional privilege

  • It is also good practice not to provide minutes containing privileged information to third parties without first taking legal advice, as a reference to the privileged material discussed at a meeting might result in the waiver of privilege.
  • Any privileged information (such as legal advice) in the minutes should be clearly identified, and ideally included in an appendix or attachment. This will assist in any later discovery process and mitigate the risk of inadvertently disclosing privileged information.

Requirement and scope of document retention

  • Having an agenda that is circulated before a meeting helps to ensure that meetings are run smoothly and facilitates the drafting of minutes which are important in establishing that directors have discharged their duties.
  • Organisations create and consistently apply a document retention policy, which addresses what documents must be retained (including the format) and when the documents may be destroyed. This policy should also deal with how draft minutes and handwritten notes are to be treated. Retention policies should also be consistent with preserving evidence for actual or likely legal proceedings.
  • Directors should satisfy themselves that board papers are adequate, and that they have sufficient information on which to base decisions. If the board makes a decision that is not canvassed in the supporting board papers or is contrary to management’s recommendation, it is good practice to provide sufficient detail about the reasons for the decision.

In summary, the Joint Statement provides useful guidance on minute taking practices for boards, individual directors and company secretaries.

This article was written by Philip Evangelou of Salvos Legal. Salvos Legal is an award-winning social enterprise that is experienced in not-for-profit, all areas of commercial, property and migration law. All of its profits from its commercial legal services are used to fund Salvos Legal (Humanitarian) which provides pro bono services to the disadvantaged community.

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