When preparing for an upcoming Board meeting and having a pack of papers waiting to be read, I can understand why most directors will zip straight to the sexier, big ticket items like financial performance and strategic initiatives. A quick skim of the minutes to check they ‘sound about right’ is all that is needed, right?
Partly…it is correct that minutes should reflect the discussions held but they are much more than that. They are evidence – your get out of jail free card and a bargaining chip for future return on investment.
For many smaller companies, directors and shareholders are usually one and the same so you may think that minutes over and above the approval of accounts is a bit excessive. However, where the company is a separate legal entity to you, the minutes of Board decisions are the only real evidence you have of what action the company has taken and the reason why.
Thinking ahead, and your future outlook – if it is your intention to sell your business at some point you will want to receive as much as you can for it so that you have a comfortable retirement and secure your family’s legacy – this is completely understandable; particularly when it has been your life’s work. Realistically though, when attracting acquirers– they will want the biggest bang for their buck and will often drive down offers based on due diligence findings. Larry Fink is driving the ESG agenda from an investment perspective and this is changing the due diligence exercise. The easiest way to evidence the ‘G’ factor is by having great minutes.
For all Boards, the minutes are your evidence that you have discharged your directors’ duties under the Companies Act 2006. They are your cheapest form of insurance should you ever need to rely on them in the case of a court dispute. This is proving the case with HMRC and GE, HMRC are pursuing a US$1bn lawsuit against GE as they are claiming that GE made a ‘fraudulent misrepresentation’ of a major transaction to evade UK tax. Allegedly GE failed to provide them with the full minutes of a crucial board meeting. It will be interesting to see how this plays out but it serves as a reminder to all companies of the importance of Board minutes and why you, as directors, should probably take a closer look at what is in yours.
To support directors and senior leaders to hone their skills in this area we offer a package that will remove any doubt you may have on what good minutes looks like.
What you get:
- 1 x 2-hour Minutes Masterclass (virtual)
- 1 x Short guide on minutes (emailed)
- 1 x Best practice minute template (emailed)
- 1 x Feedback on a set of minutes reviewed by a governance expert (drafted taking into account the masterclass guidance). Comments will be provided as required to ensure the guidance has been correctly applied. (emailed)
- Unlimited support calls to members of the Beyond Governance team to discuss implementing any element of the Masterclass.