“A well-documented board meeting creates an important historical record that can guide future deliberations and may prove useful during Board disagreements, litigation, Attorney General investigations, other governmental enforcement actions, or an audit by the IRS.”
The article, A Minute Guide to Minutes, by Patterson Belknap Webb & Tyler LLP – Justin Zaremby and Tomer J. Inbaris is here.
Many students struggle in Biz Orgs because they cannot conceptualize a board meeting. I have tried to figure out how to have a board meeting in class or a part of a board meeting. I once had a make believe board meeting where the CEO of a very successful company demanded a huge bonus or she would quit. She left the room so the board members (the class) could deliberate. The corp was very profitable and the bonus would not “hurt” the corp. The CEO was a big part of the reason for the success of the company. After some discussion, I passed around 3×5 cards and had everyone vote in secret. The vote was overwhelmingly to reject the requested bonus – all but unanimous.
I then “advised’ the CEO out in the hall of the rejection – and she “advised” me that she quit and left in a huff. Now there are shareholders who are saying that the board blew it by letting her leave. Profit is down.
What result? What would go in the minutes? What would you, as a board member, want in the minutes?