In review, our posting, titled “Basic Rules for Minutes,” described two basic rules for preparing minutes of meetings:
- Saying less is better.
Reflect compliance with certain procedural matters: (i) The date, time and place of the meeting to reflect compliance with notice requirements, (ii) who was in attendance to reflect compliance with quorum requirements, and (iii) who presided over the meeting;
Identify general matters considered: This is for purpose of refreshing the board or committee members’ memories of what happened at the meeting, so they do not need to review notes or other documents other than the minutes.
Reflect the decisions made: The decisions made are the most important content of the minutes. A record of the decisions made is not only the information needed by most audiences but is also necessary in many jurisdictions to invoke protection of the business judgment rule.
- Minutes should be the only record.
The minutes of a proceeding are the official record of that proceeding. In such cases, minutes should be the exclusive recording of the proceeding. Members of a body who take notes at a meeting should, as a routine practice, destroy those notes after satisfying themselves that the minutes accurately reflect the proceedings. Many organizations collect all written material, including notes, at the conclusion of the meeting, and as a routine or customary practice, this has been accepted by courts of most jurisdictions.
Below are some rules for documents made available to a board’s or a committee’s members before or at a meeting:
- Do not attach the document to the minutes.
A well conducted meeting will make available to the board or committee members documents to be considered at, or as background in preparation for, the meeting. Following the “saying-less-is-better” and the “minutes-should-be-the-only-record” rules, we generally do not recommend attaching these documents to the minutes. Including documents results in a risk of confidential information being discovered by parties who do not have an obligation to maintain the confidentiality of the information. In addition, many states’ laws make minutes generally available for examination by certain stakeholders, such as shareholders, members, regulators and, under certain circumstances, creditors.
- Reflect documents by name in the minutes.
Instead, we recommend that all documents made available before or at the meeting be listed in the minutes. There is no one correct way to do this, but here are several ways we like to see it done for a fictional organization, “XYZ.”
- Reflect what was received prior to and at the meeting in an introductory paragraph of the minutes and list the documents at the end of the minutes:
Each member had received materials prior to the meeting consisting of the agenda and attachments numbered 1 through 11, listed at the end of these minutes, and at the meeting, a Memorandum from Mr. Compensation Consultant, dated December 1, 2014, and with the subject “Recommended Performance Targets for 2015 Incentive Compensation.”
* * *
Materials Made Available for or at the Meeting:
Attachment 1: “XYZ Conflicts of Interest Policy”
Attachment 2: “Minutes of the January 1, 2015 Meeting of XYZ’s Board of Directors”
Attachment 3: Memorandum from Mr. Compensation Consultant dated December 1, 2014 with subject “Recommended Performance Targets for 2015 Incentive Compensation.”
- Or, if the board or committee follows a written agenda that lists the documents provided in advance, we will consider attaching the agenda and, in an introductory paragraph of the minutes, referring to it for the description of documents:
Each member had received materials prior to the meeting consisting of the agenda and attachments numbered 1 through 11, listed the agenda attached to these minutes, and received at the meeting a Memorandum from Mr. Compensation Consultant dated December 1, 2014, with subject “Recommended Performance Targets for 2015 Incentive Compensation.”
- Or, if the meeting is conducted pursuant to a written agenda and the meeting covers each of the documents, we will consider describing each document by title or subject in the text of the minutes:
The chairperson asked for disclosure of any personal or economic interests of any member on any matter scheduled to come before the meeting that could constitute a conflict of interest under the “XYZ Conflicts of Interest Policy” in Attachment 1.
Upon motion duly made and seconded, the Board unanimously ratified the Minutes of the January 1, 2015, Meeting of XYZ’s Board of Directors” in Attachment 2.
At the chairperson’s request, Mr. Compensation Consultant reviewed his Memorandum dated December 1, 2014, with subject “Recommended Performance Targets for 2015 Incentive Compensation” in Attachment 3.
- Number the documents.
We find that numbering the documents (e.g., Attachment 3 or Exhibit 1) is helpful when a document needs to be retrieved.
- Who should retain the documents?
- We recommend that the minutes reflect that the board or committee request legal counsel or an appropriate corporate officer (such as the corporate secretary) to retain such documents on the board’s or committee’s behalf:
The Committee requested that Mr. Lawyer cause his law firm to retain these documents on its behalf for a reasonable period of time.
- We favor a lawyer retaining the documents because a lawyer has an ethical obligation to maintain the confidentiality of the documents except as otherwise required by law.