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