Why minutes are important
” Um, can you repeat the part of the stuff where you said all about the things? ”
– Bart Simpson
Well, maybe Bart is not the best example of an attentive employee, but in his own way he highlights an important part of any meeting, the minutes and the fact that our notes and memories do not always recall all that were discussed or decided.
Most people avoid doing minutes like the plague, and for those that do, it is most possibly a grudge task. At best, one sticks a few action items into a list and bob’s your uncle; that is, until the proverbial brown stuff hits the fan. It is only in unforeseen and crisis situations that one realises the importance of a well-written set of minutes.
A set of clear and well-written minutes offers the following:
In terms of the SA Companies Act 71, 2008 a company must keep minutes of its board and committee meetings and it is the duty of the company secretary to ensure that the company complies with this requirement. The Trust Property Control Act 57, 1988 requires Trusts to keep proper records of administration. In addition, common law requires trusts to hold regular meetings and keep proper records of meetings.
The Companies and Intellectual Property Commission (CIPC), also requires all companies to maintain company records. Included in the definition of company records are: notices and minutes of all shareholder meetings, any resolutions taken at those meetings, minutes of meetings and resolutions of directors, directors’ meetings and audit committee meetings.
If a matter is not reported in the minutes, it will be difficult to prove that it happened for legal purposes. If the minutes do not record a matter, then the Courts will also assume that the matter was not discussed or debated.
In such a case, the members of a governing body may lose the protection of the business judgement rule, and could be held liable for violations of their fiduciary duty, solely based on inaccurate or incomplete minutes. Minutes should therefore reflect all decisions and disclosures made, and should at least signal discussion of other topics in the boardroom.
Minutes should provide an accurate record of the facts of the meeting, thus every reasonable effort should be made to do so. It is important that the minutes reflect how members of a meeting arrived at a decision. It should not be a verbatim transcription of the discussion.
Apart from the discussion points, the minutes should also reflect the details of the meeting, who attended, when and where it was held, if the meeting was quorate, when attendees entered or left the meeting, any conflict of interest, difference in opinion and resolutions, amongst others.
Drives action / Records any tasks allocated and the action owners
Good minutes are not only a record of the meeting; it also assists the leadership team, board or committee in driving a plan of action. It reflects when a decision was made, by whom and why. It also shows tasks allocated, the action owner and the date feedback was expected – it helps to get the work done.
Act as a measurement tool
Since minutes reflect the decisions taken at a meeting, they can be a useful review document to measure progress on a matter or project. Minutes are also a tool to show accountability, since it shows the action owner or owners for a certain task.
In the event of a board voting on a matter, the minutes should record what was voted for, and the number of votes for or against. Should a board member abstain from voting, the name should be recorded in the minutes, and if given, their reason for doing abstaining. This provides the board member 1) with some possible legal protection in the instance where the majority of the board approved a matter, which may later lead to a lawsuit and 2) may exclude them from the lawsuit.
Lastly, a well-drafted set of minutes should be able to give any person, who could not attend the meeting, provide valuable information and good overview of the meeting.
by NICOLINDA CILLIÉ