In brief – Board minutes can serve as crucial
Having accurate minutes is not just a formality
required under the corporations law. Detailed minutes may
serve as the crucial evidence required to defend a director
from charges of breaching of his or her duties,
including charges of trading while insolvent.
Definition and purpose of board minutes
A signed and recorded minute is evidence of a proceeding,
resolution or declaration to which the minute relates. Accurate
board minutes are an important resource for managing the
company and support sound risk management by providing a
written record of board deliberations and decisions.
Board minutes provide evidence that a board has exercised care
in decision making. They also substantiate that a board is
operating in accordance with legal requirements, including the
company's constitution and the regulatory requirements.
Board minutes assist in the management of the company
Beyond being a legal protection, board minutes also
serve an important management function. Accurate minutes are
required in order to:
Confirm any decisions made
Record any agreed actions to be taken
Record who has been allocated any tasks or
Prompt action from any relevant attendees
Provide details of the meeting to anyone unable to attend
Serve as a record of the meeting's procedure and
Compliance not universal
Despite the importance of board minutes, many companies continue
to make inadequate records of board meetings. This is
regrettable because by neglecting this simple task, directors are
depriving themselves of an important legal safeguard.
In the event of legal action being taken against the company,
minutes of meetings can be used to prove that the directors have
taken all reasonable steps to act responsibly, comply with legal
requirements and mitigate risk.
Swaab Attorneys was the highest ranking law firm and the
13th best place to work in Australia in the 2010 Business Review
Weekly Best Places to Work Awards. The firm was a finalist in the
2010 BRW Client Choice Awards for client service and was named the
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The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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