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What are board meeting minutes? They are the notes from the meeting that represent the historical record of what the company has been doing overtime. They are legal documents required by law, as they show how the company has been governed by the board of directors.
After the minutes have been drafted, the CEO and chairman should review the draft and suggest edits/changes. If the company has trusted board members, with legal expertise, it makes sense to involve them in reviewing the draft, as it will become a legal document after it’s been signed.
Before each board member signs the minutes’ document, it’s good practice to let them review the minutes. After the minutes have been signed, they should be stored as PDF files into a document filing system like Dropbox, Box, or Google Drive. Remember to keep backups of the files.
Where can the minutes surface? When the company is doing a fundraise, the new VCs will want to conduct proper due diligence on the company and review previous board meeting minutes for any discrepancies. The same goes for a buyer. If someone ever shows up with an offer, they will want to make sure that everything in the company is in order.
For you to be able to make proper meeting minutes, we’re now going to go through some important topics regarding the minutes.
Keep the board minutes “light”
Board meeting minutes should never be treated as word-by-word transcripts of the meetings. The document should be an easily digestible summary of the most important actions, decisions, and points made during the meeting. Focus on the results of discussions and not the back-and-forth of who said what. Record the length of discussions and summarize the outcome, but don’t get into every detail.
For example, this would be too detailed:
The board entered into a 20-minute discussion on the launch of the game. Board Member X suggested we double the budget to hire more staff on the game team. Still, Board Member Y disagreed and suggested leaving the budget as is until the end of the year, stating, “the game team is already big enough, compared to what the other games companies had.” Board Member X then argued that …
This version is more appropriate: 20-minute discussion on the launch of the game. Motion by Board Member X to increase the budget to $4 million until the end of the year. Motion seconded and approved.
Recently funded companies that are just starting to have board meetings should ask their outside counsel from their legal firm to act as the secretary and take notes. Granted, there will be some expenses from them showing up to the meetings, but it’s a great way to keep the counsel in the loop.
Also, the minutes do require much knowledge about the minute practices, such as rules for reaching a quorum. Quorum is the number of shareholders that must be present to make a decision. Whether or not you have a quorum present must be recorded in your board minutes.
Items to focus on
The following format is something I’veI’ve become accustomed to:
- Time and place of the meeting. If conducted over Zoom, it’s customary to call this a “Telephone conference.”
- Attendance, which can be as easy as just writing down who is there and who is not
- Agenda of the meeting should be mentioned
- Review of “old business,” anything discussed in a previous meeting that has not been resolved
- Discussion of “new business,” any new items that need the attention of the board
- Other matters
Template for minutes
Many founders have been requesting me to write a meeting minutes template, so here goes.
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