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 Seraf Toolbox: Sample Board Meeting Minutes for Early Stage Companies, board minutes are universal, somewhat mundane, and very important. And as we’ve demonstrated in the Top Ten Board Minute Writing Dos, 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 things that should not be in the minutes and make sure the minutes protect them.
This piece is the final installment of an in-depth look at what good minutes should be and what they shouldn’t. The guidelines are organized into dos and don’ts across ten categories. In this piece we tackle the don’ts.
Top Ten Board Minute Writing Don’ts & Traps
1. Meeting Preparation
-
Do not treat minute review and approval like an afterthought (it is important and should be treated as such).
-
Before each meeting do not forget to review previous minutes for open issues and to ensure continuity.
2. Document Style
-
When drafting, do not vary the style, tone, level of detail or format of the minutes from meeting to meeting.
-
Do not use abbreviations or acronyms or trendy jargon unless absolutely necessary to capture the discussion. But if you do, never do so without explanation of what they mean.
3. Minute Language
-
Do not use adjectives, adverbs, emotion or colorful or flowery language.
-
Do not use sloppy or careless writing, spelling or grammar.
-
Avoid implying insufficiency on the part of a director or member of management. Instead talk about the board “encouraging increased emphasis going forward” or some similar positive construct. As a general rule, you should not describe something in a half empty negative light when it is possible to emphasize that it is half full.
-
Do not use fancy legal language or terms of art where not explicitly necessary, especially if you are not a trained lawyer who actually knows what they mean (but even then don’t do it.)
4. Minute Contents
-
Do not attempt to create a transcript. Good minutes are a summary of what happened and was agreed, not a record of everything that was said.
-
Never record the contents of legal advice from counsel. You may destroy attorney-client privilege. Instead just note the topic and that advice was provided and received.
-
Do not incorporate documents or include detail on topics you would not want a potential acquirer or opponent in a lawsuit to see. They are the only categories of people outside the company who will ever read your minutes.
-
Do not “upgrade” conjecture or guesses to the status of fact. Where information is lacking and estimates and guesses are made, make it abundantly clear that everyone understood the information gap and the fact that these were guesses or estimates and that they were intended as such.
-
Do not incorporate external documents incompletely or by accident by referring vaguely to them without properly identifying them and explaining what purpose they served in the meeting.
5. Capturing the Meeting
-
Do not record each actual question asked and each answer given. The fact that questions and answers were exchanged satisfactorily on a topic is enough.
-
No matter what happens in a meeting never write a sentence in your minutes that you would not like to see quoted on the front page of a national newspaper.
-
Do not reflect in your minutes the exact amount of time spent on something. Reasonable people differ on this, but in our view it is unquestionably better to say something was discussed thoughtfully and in detail and questions asked and answered than to way it was discussed for 7 minutes or 13 minutes. If something goes wrong, no matter how many minutes you spent, it will always be viewed as not long enough or the thing wouldn’t have gone wrong. Better to just record robust discussion without minute-by-minute score-keeping.
-
Do not hide, whitewash or downplay opposing viewpoints or alternate strategies that were discussed. As noted below, you do not want to be describing the detail, but it is helpful to record that different viewpoints were considered.
-
Do not simplify and consolidate the timeline of the discussion for your own drafting ease. If a topic was revisited later in the meeting, note that it was discussed twice.
-
Never forget to clearly note a director’s disclosure that she had a conflict of interest.
6. Capturing the Personalities
-
Keep it neutral; never editorialize, pass judgment or reflect your own personal opinion in your minutes.
-
Do not record criticisms, heated arguments, personal disagreements, politics or complaints about vote totals.
-
Do not record jokes or humor or discussions about the weather or personal subjects, or current events or sports scores.
7. Recording Agreements
-
You do not need and should not record who moved and seconded (this is not useful detail).
-
Do not record the reason for a dissenting vote. Just record the fact that the dissenting vote happened.
8. Tips on Taking the Notes
-
Do not attempt to record minutes for a session in which you are a very active participant. Ask someone to take detailed notes on that portion of the meeting for you and to give you those notes for your use.
-
Do not record your notes for the minutes in a mixed journal containing other things you need to keep. Use separate loose leaf paper so you can toss your meeting notes as soon as the draft minutes are prepared.
9. The Importance of Timeliness
-
Do not put off writing the minutes until right before the next meeting. This is a disaster waiting to happen.
-
When recording agreements reached and resolutions undertaken, do not forget to consider deadlines you might trigger if you call something an approval rather than a discussion (for example, 83(b) tax elections or regulatory or contractual disclosure requirements).
10. Minutes Approval, Storage and Document Retention
-
Do not treat minute review and approval like an afterthought (it is important and should be treated as such).
-
Do not allow directors to take detailed notes of their own. They should rely on the minutes. If they insist, seek their agreement that they will keep them on separate loose leaf and throw them away when they get a copy of the minutes.
-
Do not forget to collect directors’ notes and extra copies of materials at the end of the meeting.
-
Do not allow people to audio or video record minutes (it intimidates people and chills honest exchange; plus it provides fodder for very embarrassing or damaging quotes to be taken out of context later).
That’s the top 10 don’ts and traps for writing or evaluating good minutes. See here for the do’s and tips.
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.
