Dear Board Doc: Minutes, Notes are Not in Sync
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Q: Over the last few meetings we have had some important discussions that I carefully recorded in my notes and that have not appeared in the board minutes. I spoke with our counsel about this and their belief is that not all matters need to be reflected in the minutes in great detail. Counsel also laid out a number of legal reasons why our minutes are not more detailed. Should I push for a change in our policy on minutes?
A: Your question raises two important issues: minutes and notes. Board meeting minutes are the official record of the board meeting. The minutes are not expected to function as a transcript of the conversations. Rather, the minutes are expected to reflect the actions taken and the essence of the board’s discussion and process in making its determinations and conclusions. Minutes can be carefully vetted and scrutinized by third parties long after the meeting occurs. Third parties may scrutinize minutes during regulatory exams or certain business negotiations, for example. Minutes often are entered into the court record during a litigation. There are several process, business and legal reasons why certain matters are not described in detail in minutes, and the decision is not driven simply by a fear of litigation. A discussion can be one-sided and the boardroom discussion may not accurately reflect all of the information available at the time, for instance. It would be wise to follow the advice to your legal counsel on this matter. A director’s notes, in contrast to minutes, are the director’s own contemporaneous writings that are not an official part of the corporate record. Keep in mind that directors’ notes can, and have, become part of the record during litigation. Current best practices advise adhering to an established policy regarding the destruction of all director notes, whether written or electronic, at predetermined intervals. During these times of remote working and increased cyber risk it is especially important to continue to follow your board’s policy regarding the destruction of electronic and paper notes. Notes taken during a meeting tend to be cryptic and incomplete, can reflect inconsistencies, and be easily misinterpreted under the scrutiny of litigation.