J U L Y 2 0 0 6 K E E P I N G G O O D C O M P A N I E S
The post-Sarbanes-Oxley environment calls
upon governing boards to place renewed
emphasis on the proper role of corporate minutes
as a record of organisational and board conduct.
Indeed, the Disney shareholder derivative
litigation is one of a series of United States cases in
which the state of corporate minutes played an
important role in the court’s decision.
While experts may disagree on the most
appropriate style for minutes (for example,
‘comprehensive’ versus ‘minimalist’), there is
virtually no disagreement on the importance
attributed to an effective minute-taking process. It
is becoming increasingly clear that properly
prepared corporate minutes can provide the
organisation and its board members with
meaningful protection against certain liabilities,
while inadequate minutes increase legal exposure.
Given the regulatory pressures of corporate
responsibility, traditional approaches to minute-
taking may no longer be sufficient to serve the
interests of the organisation and the board.
Specifically, this renewed emphasis is likely to
require a substantially increased role for both the
general counsel in the minute-taking process and
individual board members in the review and
approval of draft minutes.
The goal of this discussion is to guide
corporate secretaries and general counsel as they
advise executive leadership and the board on an
updated, effective minute-taking process.
The role of minutes
How minutes can help
The fundamental role of corporate minutes is to
preserve an accurate and official record of the
proceedings of a board or committee meeting.
Well-kept corporate minutes serve as a record of
corporate decisions, reflect director dissent where
appropriate, offer guidance for future board
action, serve as a valuable source of
contemporaneous evidence in regulatory or
judicial proceedings and reduce misunderstanding
as to the intent of the board. Corporate minutes
can document compliance by board and
committee members with their fiduci