Our posting, titled “Basic Rules for Minutes,” described two basic rules for preparing minutes of meetings:

  1. 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.

  2. 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.

Call and Notice

Regular meetings, the time and place of which are provided in the organization’s or directors’ regulations or bylaws, or other governing documents, generally are deemed called by those provisions of the applicable governing documents, and under most states’ laws, no calling of the meeting is legally required to be made or notice of the time and is legally required to be given. Special or other meetings, the time and place of which are notprovided in those governing documents, are generally required to be called by the board’s chair person, or two (or some number) directors, or the president, CEO or some board or senior executive officer. Notice of the time and place of the meeting is legally required to be given typically at least two days before the meeting to each director by personal delivery or by mail, telegram, cablegram, overnight delivery service, or any other means of communication authorized by the director.

In most states, the notice is not required to state the purpose of a meeting, including a special meeting. However, a best practice is to circulate to all members attending any regular or special meeting an agenda and related documents as discussed below.

Agenda and Documents

Regardless of whether a call by an authorized person or notice of the time and place of a meeting is required, a best practice is to circulate to all members attending the meeting an agenda and any documents to be considered at, or as background in preparation for, any board or committee meeting. If notice is required, the best practice is to circulate the agenda and documents with the notice. If notice is not required, a suggested practice is to send the agenda and documents at least four days before a regular meeting and at least seven days before any special meeting. However, in the event of an emergency, two days is acceptable, or, even shorter, if every attendee is available to receive and review the documents.

Following the rules for minutes that shorter is better, the agenda should be short stating the date, time and place of the meeting, listing (not describing) the matters to be considered, stating briefly the action being asked of the board or committee at the meeting, and listing the documents to be considered at, or as background in preparation for, the meeting.

The first two items of every meeting agenda should be the call of:

  1. The meeting to order; and

  2. Disclosure by members of any personal or economic interest, or any other conflict, the member may have in any matter being considered at the meeting.

The call for disclosure of conflicts at the beginning of each meeting is very important because most state laws require the disclosure by any member having a conflict with any matter to all other members before the matter is considered. Knowing this at the beginning of the meeting allows the chairperson or the members to rearrange the agenda and determine whether the member with the conflict should recuse himself or herself during consideration of the matter.

A third item of every board or committee meeting agenda is approval of the minutes of the last board or committee meeting. This is often an item that can be included in the “consent agenda” portion of the meeting which will be discussed in our next posting in this series.

Although we generally do not recommend following Robert’s Rules of Order for the reasons discussed below, Robert’s Rules of Order 4th Edition requires the following items in the following order:

  1. Reading and approval of the minutes.

  2. Reports of Officers, Boards, Standing Committees.

  3. Reports of Special Committees.

  4. Special Orders.

  5. Unfinished Business and General Orders.

  6. New Business.

  7. Adjournment.

We believe blind adherence to this order may not result in the best time utilization of the board or committee under many circumstances because it does not distinguish the difference between important business and unimportant business. We prefer an ordering of the agenda so that important matters are discussed earlier in the meeting, and that similar matters be grouped together, regardless of whether they are new or unfinished.

Documents

We recommend following the suggestions in our prior posting, “Reflecting in Minutes Documents Made Available for Meetings,” including:

  1. Listing the documents by their name or title or, with respect to a memorandum, its re:-line or subject, and not summarizing or otherwise attempting to describe the document. The problem with summaries or brief descriptions is that someone can always find fault that something important was omitted.

  2. Giving each document a number (e.g., Attachment 3 or Exhibit 1) so that, if necessary, it can be retrieved if required.

Although including the agenda of the board or committee meeting with the minutes of the meeting is an acceptable practice, as discussed in “Reflecting in Minutes Documents Made Available for Meetings,” we recommend against including the documents in the minutes or minute book. Instead, we recommend that the minutes reflect that the board or committee requests legal counsel or an appropriate corporate officer (such as the corporate secretary) to retain such documents on the board’s or committee’s behalf.

Robert’s Rules of Order

As discussed above, we generally do not recommend following Robert’s Rules of Order because Robert’s Rules of Order are intended for large assemblies, such as Parliament or Congress or state legislatures, or mass meetings, such as meetings of a large number of members of a church or golf club, or public bodies such as school boards and city councils. These rules tend to stifle discussion and discourage participation by those not understanding the rules.

Instead, if some formality in rules is desired, we recommend the provisions of Article IX of the 4th Edition of the Rules that is for Committees and Boards which can be found here. Even better, in our opinion, are more recent rules for small boards or boards of small organizations that in essence provide that:

  • Members are not required to obtain the floor before making motions or speaking, which they can do while seated.

  • There is no limit to the number of times a member can speak to a question, and motions to close or limit debate generally should not be permitted.

  • Informal discussion of a subject is permitted while a motion is pending.

  • The chairman need not rise while putting question to vote.

  • The chairman can speak in discussion without rising or leaving the chair; and, subject to rule or custom within the particular board (which should be uniformly followed regardless of how many members are present), he usually can make motions and usually votes on all questions.

  • Sometimes, when a proposal is perfectly clear to all present, a vote can be taken without a motion having been introduced. A vote can be taken by a show of hands or acclamation.

  • Any member may limit debate by calling informally for the “question” which is short-hand for the formal motion “to close debate and vote immediately on the pending question” or “I move the previous question.”

Chairperson’s Responsibilities

We believe the chairperson has the responsibility to “preside” at the meeting, meaning to facilitate its proceedings. If the chairperson is the CEO, he or she probably has contributed to or determined the agenda for meeting. If the chairperson is an outside director, he or she should have input to the agenda, including the right to request or the chairperson’s or any other director’s behalf, to have an item placed on the agenda.

The chairperson needs to make sure everyone has an opportunity to ask any questions, or express any thoughts, regarding any matter being considered during the meeting. However, to facilitate the proceeding of the meeting, the chairperson should encourage questions such as:

  1. How does this action further the corporation’s best interest?

  2. Who else benefits from the action?

  3. How does this further the Organization’s strategic direction?

  4. What is being asked of us as a Board?

  5. What is to be expected of management?

  6. And most importantly, what if things don’t go as expected? For example, “What happens if things don’t go according to plan?” “What financial, legal, ethical, strategic, and reputational issues are involved?” Policy makers, such as Board members, must consider all of the possibilities, especially those that could have a high impact, albeit remotely probable, and not just the normal.

A more delicate responsibility of the chair person is to diplomatically move the proceeding along when a director begins second guessing “how” management is going to do something because that’s management’s responsibility.

Executive and Privileged Sessions

Finally, we recommend that every board meeting and every oversight committee adjourn to an executive session that includes just the outside directors or, for public companies and some regulated industries, directors that are independent within the definition applicable to those companies or industries. If the session is for purpose of receiving legal advice or reports, the session should be privileged and not include anyone, even an outside or independent director, who may have a conflict of interest. We do not recommend that minutes be taken of an executive or privileged session. To conclude an executive or privileged session, the board or committee should adjourn the session and reconvene the meeting. Then, a majority vote of whoever is present may adjourn and close the meeting.