Note: This article is part of an ongoing series on Board Directors. To learn more about their roles and responsibilities, download this free eBook today Director's Guidebook: How to be an Effective Board Director in Early Stage Companies or purchase our books at Amazon.com.
As noted in Sample Board Meeting Minutes for Early Stage Companies, board minutes are universal, somewhat mundane, and very important. When writing them, you are trying to achieve a number of different objectives and that makes writing good minutes tricky. In a perfect world, they would be written by outside counsel, but not every startup can or does get help with minutes, so sometimes it is up to the investors to speak up about omissions and make sure the minutes protect them.
Accordingly, here is an in-depth look at what good minutes should be and what they shouldn’t. The guidelines are organized into do's and don’ts across ten categories. In this piece we tackle the do's.
Top Ten Board Minute Writing Dos
1. Meeting Preparation
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Minutes should reflect that directors received advance notice of the meeting (it was duly noticed) and that the meeting was duly called to order.
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Minutes should reflect that the directors received advance copies of the materials before being asked to cast votes on anything.
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Key resolutions to be taken at a meeting should be circulated in draft form in advance of the meeting.
2. Document Style
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Minutes should be written in neutral, plain third party language.
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From meeting to meeting, minutes should be written in a consistent format, writing style, and tone; preferably by the same person each time.
3. Minute Language
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Minutes should always be written with the larger context in mind: write like you expect a lawsuit opponent to read them.
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Before being circulated, minutes should be closely reviewed and edited for factual and writing mistakes, word-processing glitches, spelling, punctuation and grammar errors.
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Drafters should always keep the language simple and easy to interpret - if it can be misinterpreted, it can be used against the company and the directors.
4. Minute Contents
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The person writing the minutes should make them long enough to cover the subject and emphasize that there was deliberation, care and thoughtful discussion, but they should not be so long that they contain extraneous detail - you want your minutes to be both concise and precise.
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Minutes should be proportional - they should reflect a bit more length in the areas where there was a longer discussion.
5. Capturing the Meeting
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Minutes should make note of guests: experts, management members, as well as late arrivals and early departures.
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Minutes should reflect, without excessive detail, that deep substance was reviewed and detailed questions were asked and answered. The language of the minutes should note very frequently that questions were asked and answered satisfactorily and discussion ensued.
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Minutes should mention if primary materials or other sources of information were consulted before or during a meeting.
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Minutes should reflect the fact that opposing viewpoints and alternate strategies were presented and discussed. Do not document the augments, but rather document the fact that there was thoughtful discussion of different perspectives.
6. Capturing the Personalities
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Minutes don’t need to note the identity of every question asker or answerer (minutes should never fall into he said/she said format), but they should identify the name of the person making a critical point or contributing key information.
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Minutes should always note when a vote is unanimous or when it passes over minority objection (without naming who objected). While you do not want to note the names of objectors (unless they make a special point of insisting, which is their right), you do want to note the names of directors who abstained or recused themselves (and this is just the fact of the abstention or recusal but not the reason for it.)
7. Recording Agreements
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Minutes should always make it abundantly clear that directors understood and considered the consequences of their actions.
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Minutes should clearly record assignments and delegations as well as the deadlines for those tasks.
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Minutes should be drafted with complete resolutions that can stand on their own and be understood even without the surrounding minutes for context - get help from counsel or find good models when drafting formal resolutions.
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Minutes should record and reflect whenever any decision has been reached, even if no formal resolution is necessary or recorded.
8. Tips on Taking the Notes
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If you are the one responsible for drafting minutes, consider making it easier on yourself by creating a template for note taking so you can just check off attendee status (in person, on phone, or absent), fill in dates, fill in location, etc.
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Try your hardest not to use an audio or video recording (because they intimidate people and may chill discussion). But if you do, be disciplined and get rid of the recording as soon as you have written draft minutes, and make sure your company’s document retention policy is consistent with such deletion. You do not want recordings lying around for opposing counsel to take out of context.
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If you miss something or things are unclear to you, immediately seek clarification to make sure you know and can accurately record what was decided, or whether a resolution was taken, or what the next step is.
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Always carefully identify and record the date, title, version and source of external documents which are discussed and agreed to in the meeting.
9. The Importance of Timeliness
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Write up the minutes as soon as you can and circulate them for approval when everyone’s recollection is fresh and assignments, delegations and deadlines are still relevant.
10. Minute Approval, Storage and Document Retention
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Clearly mark all draft minutes as “DRAFT” until they are finally approved.
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Once your minutes are approved, destroy all early drafts and alternative drafts and other directors’ personal notes. The minutes are the official record and should be all the notes anyone else needs. If you allow other notes or drafts to float around, you are allowing contradictions and liability to fester.
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File any documents specifically incorporated into the meeting as an official part of the meeting with the minutes in the minute books. Keep other supporting material in a separate parallel file that is not part of the minute books so that you have what you need when you are required to share the minute books, but you don’t have to share too much extraneous or sensitive materials as part of complying with the requirement.
That’s the top 10 dos and tips for writing or evaluating good minutes. Next up in this series are the Top 10 Don’ts and Traps.
For a more in-depth discussion on early stage company board issues, download our companion eBook: Director’s Guidebook: How to be an Effective Board Director in Early Stage Companies or purchase our books at Amazon.com.
To access additional resources and download more templates, view our entire Director’s Guidebook Series and Startup Board Dynamics Series.
