To some, capturing and publishing minutes from board of directors and committee meetings may seem like a terrible nuisance. After all, the important work takes place in preparation for these sessions, in the spirited discussion among the assembled participants, and in the resulting decisions and actions that shape the future of the organization. So why task someone with this tedious responsibility?
Well-documented board and committee meeting minutes serve a number of crucial functions that are in the best interests of the organization and the communities it serves.
Why Board Meeting Minutes Matter
Board minutes provide tangible evidence that the board of directors meets its organizational and fiduciary responsibilities. They attest to the board’s role in defining strategy, adopting policies and procedures, structuring services, setting rates, approving budgets, rendering key decisions, and making prudent use of resources. They also demonstrate the care taken to monitor, evaluate, and report on the fiscal condition. And when a board’s actions come under scrutiny by a regulator or auditor, an old maxim applies: “If it isn’t documented, it didn’t happen.”
When shared with constituents, board minutes demonstrate a commitment to open communication and transparency. Communities served by rural utility entities take a keen interest in service offerings, service quality, and rate adjustments. To that end, board minutes need to provide the context for matters brought to the board’s attention and the basis for its actions and decisions. Furthermore, the style, tone, and language should also be accessible to the prospective audience.
Board minutes provide institutional memory. With members cycling on and off of board service, minutes help new entrants come up to speed quickly while giving a sense of the journey that brought the organization to this moment in time. Even for established members, the minutes provide a point of reference to review past actions and decisions and why they made them.
Minutes ensure that board members share a common understanding of their recent actions, decisions, and any follow-up. Any discrepancies can be discussed and resolved at the next meeting, if not sooner. They also create accountability for action items and the parties responsible.
What Board Minutes Should Include
At a bare minimum, minutes should include:
- The date, time, and location for the meeting as well as a notation regarding whether it is a regular or a special meeting
- The names of the directors in attendance (and absent) from the meeting as well as those who came in or left during the meeting
- Summaries of key information from reports to the board (e.g., committee reports, operational reports, financial reports)
- Decisions reached and, where appropriate, alternatives considered and rationale for selection
- Actions taken – e.g., approval of minutes, reports, capital expenditures, budgets
- Names of board members who recused themselves from a vote, especially when the vote involved a potential conflict of interest
- Action items requiring follow-up along with assigned roles, responsibilities, and deadlines
As a general rule, the minutes should include sufficient detail to prove that actions and decisions were properly executed in accordance with the board’s fiduciary responsibilities. They should not be so wordy as to obscure important information or expose the organization to external liability. Board minutes – including all attachments, exhibits, and reports – are subject to discovery in legal action as well as audit by the IRS and other regulators. Consult an attorney and/or your state regulators when in doubt.
What Board Minutes Should NOT Include
From time to time, the board may need to go into an executive session to discuss sensitive or confidential information. Common examples of such occasions include staff disciplinary matters, staff dismissals, and compensation structure for key employees. The substance of these discussions is not included in board minutes. A brief notation in the minutes reflects the move to executive session and the general topic to be discussed. Names of affected employees are excluded.
Don’t Forget About Committees
While board committees do not carry the same burden of proof to evidence their organizational commitment, they can profit from the discipline of capturing formal meeting minutes. For example, a committee might provide the means to process member suggestions, complaints, and feedback for board review. These minutes capture member input and committee recommendations for action. Committees also have the same needs for institutional memory to address a rotating cast of characters and to provide a frame of reference for past decisions. They ensure that everyone is on the same page with respect to recent actions, decisions, and responsibilities.
Meet the Author
Amy Fenerty, CPA
Aldrich CPAs + Advisors
Amy joined Aldrich in 2000 and is dedicated to serving utility organizations. She has experience with clients of all sizes and performs all aspects of the audit for her communications and utilities clients. Amy provides financial and accounting services, cash flow and internal control reviews, as well as regulatory assistance and consulting. She graduated from…
- Internal control reviews
- Certified Public Accountant
- Regulatory assistance and consulting