Minutes – Time to Take Note Minutes – Time to Take Note Minutes – Time to Take Note

The keeping of an accurate, balanced and concise record of the proceedings of board meetings is a crucial function in any organisation. In this article, Alan Browning, Associate Director with KPMG Legal Company Secretarial, examines the importance of taking board minutes.

In 2018 the media widely reported on the courts questioning of the Company Secretary of Anglo Irish Bank concerning the details contained in minutes of meetings. This together with the highly regulated environment where Financial Services companies operate demands the need for an experienced and qualified Company Secretary to take accurate minutes. The Company Secretary is regularly tasked with taking minutes of Board or committee meetings. This skill can often be overlooked and at the very least undervalued.

The keeping of an accurate, balanced and concise record of the proceedings of board meetings is a crucial function in any organisation. The purpose of minutes is to provide a formal long term and legal record of meetings of the Board of Directors. Minutes can be used in a variety of ways, including, tracking the progress of a company, evidencing challenge and discourse in the Boardroom, laying out future plans and recording the formal approval of decisions taken by the Board. By providing a historical record, the minutes can provide corporate memory and act as a tool for guiding the Board in the implementation of future strategy and direction. 

The taking of minutes can often be delegated to someone who is more junior in the organisation without the required training and experience. Regulated organisations where the minutes may be reviewed and scrutinised by a regulatory body will apply a high degree of importance to the accuracy of minutes. It should therefore follow, that such organisations apply an equal level of importance to the production of minutes and satisfy themselves that the person taking the minutes is someone with the requisite skills, experience and qualifications to do so. 

• Circulate an agenda far enough in advance so amendments may be made- it may also be helpful to develop an agenda planning guide for various agenda topics which are dealt with on a yearly basis e.g. approval of financial statements
• Ensure circulated board packs and attachments are detailed, orderly and easily understood, keep them accurate, impartial and balanced
• There is no one-size fits all approach to minute taking
• The degree of detail needed will depend on the matter being discussed, the sector in which a company operates, regulatory requirements and various other factors
• Be mindful of regulatory needs as well written minutes can convey the assurances a regulator requires especially in respect to the evidence of ‘challenge’ in the Boardroom
• Minutes are generally written in the past tense
• Minutes should be written, in a clear and concise manner whilst still providing the context of the discussion and what decisions were made and the rationale behind them.
• Minutes should include the key discussion points, challenges, decisions made and agreed actions

There are three main reasons why keeping minutes is an important task-

1. Legal Protection
   Minutes are an effective way of documenting actions taken by the Board to ensure that a company is compliant with all relevant legislation and regulations. This could offer a certain level of protection to the Board by providing a form of prima facie evidence that the company and its directors have fulfilled their legal and regulatory obligations. Many legal professionals will maintain that if a decision or action is not noted in the minutes then it did not happen.
2. Driving Action
   Accurate and efficient minutes can assist with the implementation of the company’s strategy. Good minutes provide clarity of who made the decisions as well as how and why they arrived at a decision.
3. A Benchmark for the Company
   Effective minutes can act as a useful tool for enabling the Board, or the company’s Auditors to track the progress the company is making. They can also provide accountability for who is responsible for implementing certain actions.

Minutes should always be kept in the company’s minute book. The minutes should be prepared as soon as possible after the meeting and typically a first draft should be available within seven days. They should then be reviewed by the Chairperson and adopted and signed at the next meeting. If small typographical amendments are required to the minutes at the meeting adopting them, the amendment may be initialled before sign-off by the Chairperson. The final signed minutes are then entered in the minute book. 

The Companies Act 2014 requires that a company’s board minutes be recorded and retained for inspection by the Director of Corporate Enforcement at any given time. Not complying with this section is considered an offence under Section 116 (6) and any company or officer of the company shall be guilty of a Category 4 offence and liable for a Class A fine.  Requests to inspect the minutes may also be made by a regulator or the auditors.

The keeping of good minutes and the skills to do so should never be underestimated and having a person with the necessary skillset in place to do so is vital for any organisation.

At KPMG we have the largest Company Secretarial Department in Ireland with over 25 governance professionals, some of whom have over 20 years’ experience and are well versed in acting for organisations that operate in a heavily regulated market. To assist our clients with modernising their reporting we have invested in an internal digital reporting system which will allow clients to have instant access to their board packs, cut down on the cost of distributing board papers as well as maintaining an historical record of board meetings for future reference. The attached link provides more detail in relation to this service Decision Time Video.

For any assistance you may require in board reporting, modernising your board meetings for the digital age or general company secretarial advice please contact Salvador Nash, Alan Browning or Sinéad Humphreys.