Key issues:

  • When managing and governing the business of a company, directors and officers need to be mindful of the hallmarks of good meeting minutes and also the significant role that meeting minutes play in revealing the state of mind of a corporation.
  • The Australian Institute of Company Directors (AICD) and the Governance Institute of Australia (GIA) release a joint statement on board minutes.

Taking accurate and appropriate minutes of board meetings can be very important for both the running of a company and for directors to manage their risk in doing so. Minutes form a legal record of matters discussed and agreed at board meetings, and as such can provide evidence to establish that directors are upholding their duties, and can act both as a reminder for, and as evidence of, decisions made during those meetings and the reasons for making those decisions.

Keeping this in mind and taking into account the recent heightened scrutiny of the practice of minute taking following the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the AICD and the GIA have recently released a joint statement on board minutes (Joint Statement). In the Joint Statement, the AICD and GIA have collaborated to summarise key principles behind taking board minutes, provided their views on matters to be included in minutes, and considered the approach to board papers and document retention policies. The Joint Statement also attaches a legal opinion from Dominique Hogan-Doran SC and Doulas Gration, covering matters including:

  • the purpose of minutes and detail to be included;
  • drafts and notes;
  • amendments to minutes;
  • challenge and dissent;
  • board papers and other supporting documents; and
  • legal professional privilege.

The Joint Statement itself is well worth a read for anyone responsible for contributing to, or the preparing of, board minutes, and is available on the AICD’s website, the GIA’s website and Dominique Hogan-Doran SC’s website.

For completeness, we note that HopgoodGanim had no part in the preparation or release of the Joint Statement.

Our thoughts

The Joint Statement highlights the importance of ensuring that companies, their directors and officers do not fall into the “box ticking” mentality when it comes to meeting minutes. In our experience, the consistency, quality and reliability of meeting minutes are often examined during adversarial court proceedings and regulatory investigations when aggrieved persons (like shareholders) or regulatory bodies are seeking to establish the state of mind of the company (and by corollary, the state of mind of its directors). Contemporaneous, accurate and concise meeting minutes are often the best (and sometimes the only) evidence available to a court or other judicial body in this regard. Against that background, we have set out here some of the key take-aways from the Joint Statement that organisations and persons involved in the preparation of meeting minutes should consider:

Legal Requirements

There is a legal obligation under the Corporations Act 2001 (Cth) (Corporations Act) for a company to keep minute books in which it records, within one month, the proceedings and resolutions of directors’ meetings (including the meetings of any committee).

Company records, including board minutes, may be used in regulatory investigations or in Court proceedings, and can be crucial to any finding that a company, its directors and/or other officers, have met or breached their legal obligations.

Contents of minutes

There is no legal requirement as to the content of such minutes, and this will vary from company to company.

Ultimately, minutes should be prepared in a consistent, succinct and clear manner, capturing the board’s decisions and material reasons for those decisions concisely and accurately, and so as to record what actually happened at the meeting. Someone who was not present at a meeting should be able to follow the decisions that were made from the minutes of that meeting. Importantly, minutes should not be a transcript of the meeting as the board ultimately acts as a collective body and minutes taken in that nature may have a chilling effect on appropriate debate.

Obligations don’t stop with the minutes

Given the evidentiary weight that completed and signed minutes carry, directors should carefully and actively review the minutes of board meetings, and the process of finalising and approving the minutes should be managed rigorously by the chair of the particular meeting.

Boards should follow up on the decisions made at board meetings with the executive and management and ensure promised actions are completed, and in particular, ensure that any matters they recorded concern about are followed up on and resolved.

Legal privilege

Boards will often consider a company’s legal advice, which would normally be subject to legal professional privilege (see our recent factsheet for further information). Privilege is not ordinarily lost by the board receiving the advice.

However, it is important to exercise caution and judgment in determining the degree of detail of privileged information (if any) that is necessary to include in relevant minutes. Any privileged information that is included in the minutes should be clearly identified as such, or as an alternative included in an appendix or attachment rather than the main body of the minute.