Board minutes are a record of board decisions and the process, or proceedings, by which those decisions have been made. They are used to convey board decisions to the executives who will implement the decisions and serve as reference for the board if it wishes to revisit a decision. They are not a transcript of every word that was said during the meeting or a record of individual directors’ contributions. However, they can be used as evidence in legal proceedings, and as such care must be taken with the preparation of the board minutes.
As official company records of directors’ meetings, courts place evidentiary weight on the contents of minutes. Minutes are increasingly being used in court to help prove or disprove that directors have fulfilled their fiduciary duties. Well-taken minutes record corporate decisions, highlight director dissent where appropriate, reduce misunderstandings as to the board’s intent in a matter and show compliance with legal duties and responsibilities. The James Hardie case was a stark reminder of the dangers of not keeping proper minutes of a directors’ meeting (ASIC v MacDonald (No 11) (2009) NSWSC 287).
This director tool offers general practical guidance on the purpose, form and function of board minutes. For a more detailed consideration, the Australian Institute of Company Directors and the Governance Institute of Australia issued a joint statement on board minutes in August 2019.1 This collaborative statement aims to guide the current debate on this topic and outlines key principles, provides consideration on matters to be included in minutes and considers the approach to board papers and document retention policies.
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