Section 251A of the Corporations Act 2001 (Cth) relevantly requires minutes of “proceedings” and “resolutions” of directors’ meetings, including meetings of a committee of directors, to be recorded within one month. What are the legal requirements for board minutes? It is not advisable for the CEO or chair to take the minutes, as they should be participating in the meeting. On occasion, an organisation might prefer to use an independent minute taker - the organisation’s solicitor or accountant. This may be a director or the person that is generally responsible for maintaining the company registers and notifying ASIC of basic changes when required. If a proprietary company does not have a company secretary, it is common for a person from within the company to be asked to perform the function. In public and proprietary companies, the company secretary is the usual minute taker. The James Hardie case was a reminder of the dangers of not keeping proper minutes of a directors’ meeting ( ASIC v MacDonald (No 11) (2009) NSWSC 287). However, poorly taken minutes may also be used against a director by regulators or the opposing party. Minutes must be concise, phrased in non-emotive language and appear impartial and above suspicion. Well-taken minutes record corporate decisions, highlight director dissent where appropriate, reduce misunderstandings as to the board’s intent in a matter and show compliance with legal duties and responsibilities. In particular, minutes can be used in court to prove or disprove that directors have fulfilled their fiduciary duties. However, they can be used as evidence in legal proceedings and as such, care must be taken with their preparation. They are not a transcript of every word said during the meeting or a record of individual directors’ contributions. The purpose of minutesīoard minutes are used to record the decisions of the board to convey board decisions to the executives who will implement them and serve as reference for the board if it wishes to revisit a decision. They are not meant to be a verbatim record but if directors feel strongly about a pivotal issue there is generally the opportunity to request that their concerns be noted in the minutes,” says Catherine Walter AM, a non-executive company director. “Directors understand it is a fine art on what to include and what to exclude from minutes. “I like them to accurately portray the flavour of what was said.” “I don’t like long-winded minutes and verbatim commentary,” says Bayes. The minutes suggested the issue wasn’t discussed and committee members asked no questions.ĭavid Bayes FAICD, a non-executive director of Sigma Pharmaceuticals and AICD likes minutes to get to the point. Likewise, NAB chair Ken Henry AC was questioned whether a board meeting had discussed the bank’s dispute with ASIC over advisor service fees. The final round of hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in November raised several issues regarding board minutes, making the taking of minutes a hot topic.Ĭounsel Assisting Rowena Orr QC questioned current CBA chair Catherine Livingstone AO FAICD (who was not chair at the time of the events discussed) on why the minutes of the bank’s October 2016 board meeting did not contain a record of when the chair challenged management in relation to a regulatory report, raising the issue of whether the CBA’s approach to the board minutes was in compliance with section 251A of the Corporations Act 2001 (Cth).
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