All authority for decision making as to matters of policy, direction, strategy and governance (the “important matters”) and oversight as to matters critical to the health of the organization for its various stakeholders (the “critical matters”) is to be exercised under the direction of the organization’s board. The best way to facilitate a board’s focus on the important and critical matters is the skill of the chairperson to “diplomatically move the proceeding along” when the board gets sidetracked on minutia, as discussed in our last posting, “Suggestions for Conducting Meetings.”
Also, our last posting recommended not blindly adhering to Robert’s Rules of Order in determining the order of an agenda, because it does not distinguish between important and unimportant matters. We prefer an ordering of the agenda so that important matters are discussed earlier in the meeting, and that similar matters are grouped together, regardless of whether they are new or unfinished.
A tool that can be used to focus on the important and critical matters is to incorporate a consent agenda as part of the agenda for any meeting. A consent agenda is a collection of all routine matters not expected to require discussion into one agenda item. The consent agenda can either come at the beginning or the end of the meeting. Matters on the consent agenda are not discussed by the board and are all approved in one vote.
However, either before or at the meeting, board members may move any matter from the consent agenda to be discussed by the board. Unless the board has taken formal action to identify the matters collected in the consent agenda, any board member may remove the matter for discussion. If the board has taken formal action to identify the matters collected in the consent agenda, some boards may require that the removal must receive the vote of a majority of directors present at the meeting at which the agenda is being considered, though this may stifle discussion. A consent agenda typically includes:
- Minutes of a previous board meeting
- Acceptance of minutes of committee meetings
- Routine committee, management, or staff reports not requiring any action by the board other than acceptance or ratification
- Acceptance of resignations from the board
- Updates or background reports provided for information only
- Routine contracts in the regular course of business that fall within policies and guidelines
Certain items should have significant discussion before they find their way onto a consent agenda. These items include:
- Audit, financial, risk management and similar reports that may require management or professionals to present information or answer questions
- Executive committee decisions or management actions which are necessary for the board to understand
- Any important matter or critical matter for which the board as a whole is the highest authority
Rather than being imposed by the chairperson, we recommend that a board agree to implement a consent agenda to see if it saves time for the important and critical matters. As the board gains experience with the consent agenda, it can adopt policies for what should be included in a consent agenda.
A consent agenda only works if the documents related to the matters collected in the consent agenda are made available to the board reasonably in advance of the meeting, and if each director actually reviews the matters and conducts whatever due diligence the director reasonably believes is necessary to approve the matters. Failing to do this could result in breach of the duty of care for a director and the board.
If a director has a question for clarification of a matter on the consent agenda, the director’s duty of care generally requires the director to ask the question before the meeting. If the answer clarifies the matter, the matter remains on the consent agenda without taking time at the meeting. Otherwise, the matter should be discussed and any issues addressed.
When properly applied and understood, the use of a consent agenda can dramatically improve the efficiency of board meetings. Most boards find the result is that they are more productive in considering the important and critical matters.