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What is the purpose of a board meeting?

By law, a corporation is required to have a board of directors. The board is an elected group of people that represent stockholders. Stockholders are people who own stock in a company. The law is different in each state about how often board meetings must happen, but all states require meetings at least once a year.

A board meeting is a formal meeting of the company’s board members whose role it is to watch over and guide the business. Meetings may have a scheduled date and time, or can be called for special cases. During board meetings, board members make plans for the organization, vote on major decisions, and approve other plans. Board meetings follow the organization’s rules and any rules made by the board members.

Usually, companies set rules that govern how board meetings are conducted. Sometimes those rules may be part of the Articles of Incorporation. These rules may set forth how many meetings to hold per year, when to hold elections, who takes over when a leader leaves, and how to make decisions and plans. They also set other rules, like when meetings can be canceled.

Board meetings usually must have a quorum, or minimum number, of board members present before they start, or the meeting does not count. Different states have different rules about what qualifies as a quorum, and for smaller boards, it may only require a few members.

What documents need to be prepared before the meeting?

In most cases, several documents need to be ready before a board meeting.

Notice

First, the company typically must give members proper notice of the meeting. While state laws may vary, generally, many require meetings to be announced a certain number of days ahead of time. The company can send a Notice of Meeting to board members with information about the date, place, and time for the meeting and whether it is a special meeting. If the company cannot give proper notice in time, then they usually must give the board members a Waiver of Notice to sign. This document says the board members are okay with not getting formal notice about the meetings.

Agenda

An organization’s rules, or bylaws, may require the board to have a specific list of things to talk about before calling the meeting. Even when not required, creating a discussion plan before meetings can help board members. An agenda lets the board know what the meeting will cover and allows them to effectively prepare. An agenda can also help keep meetings organized, efficiently run, and timely.

Minutes

Once the meeting starts, laws often require corporations to take minutes. Minutes are simply notes about what everyone said and decided during the meeting. These laws usually do not require certain information to be in the minutes, but well-written minutes tend to be very detailed.

Minutes typically record all board resolutions passed and other key decisions. If they fail to include these important decisions, then board members or the company risk legal trouble. The secretary for the board of directors usually signs the minutes after every meeting. Organizations may want to use a Corporate Minutes template to make sure their meetings are recorded well. It is good practice to let board members see the minutes from the previous meeting either right after it ends or before the next meeting starts.

Proxy

If a board member cannot attend a meeting, they may choose another person to vote or speak for them. The term proxy can refer to both the person chosen and the written statement that allows that person to vote. There are two types of proxy, general and specific:

  • A general proxy lets the proxy make their own choice when voting.
  • A specific proxy, sometimes called a limited proxy, gives specific instructions for how the board member wants their proxy to vote.

State laws and the corporation’s bylaws usually decide how proxy voting works, such as whether the proxy must be in writing.

Board meeting packet

It can be helpful to assemble all the documents into a packet to help board members prepare and stay on track. Some other documents that may be part of a board meeting packet include:

  • The current company strategy.
  • Fact Sheets.
  • Human resources and management reports.
  • Performance reports.
  • Financial reports.
  • Legal reports for litigation and compliance.
  • Approved budgets.
  • Committee reports.
  • Program highlights.
  • The organization’s bylaws.
  • Major deals and correspondence.

What documents are used during the meeting?

Board members use a few documents during the meeting. Perhaps one of the most important is the meeting minutes. They record what happened during the meeting and typically need to be a true and accurate record.

Board members can look at the minutes from the previous meeting either before or during a meeting. Reading the minutes helps make sure everyone knows what happened and the meeting runs smoothly. Once board members approve the minutes, the notes become part of an organization’s records.

Reports

During board meetings, board members may also look at reports prepared by staff, the CEO or president, other board members, or consultants. These reports may explain important news or changes in the company. They can update board members about how the company is doing and what happened in other meetings. They typically become a part of the corporate record.

Resolutions

Resolutions are other important board meeting documents. A Board Resolution, sometimes called a Corporate Resolution, is a way to record a decision made by a corporation's board of directors or stockholders for the corporation. After making a resolution during a board meeting, this document records the specifics of that decision in writing.

An important compliance document, a Corporate Resolution records any major decision made by stockholders or a board of directors during a meeting. The board usually uses this document when a new board member is voted in or the company hires a new employee, sells stocks, or makes other big decisions. It is typically a written record of a corporate action that must be followed. Corporate resolutions can provide a necessary paper trail of board decisions and leaders. The Internal Revenue System (IRS), state regulators, stockholders, and company officers might look at them later to make sure the company is following regulations, tax laws, and its own bylaws.

Fact Sheets

Businesses can also prepare Fact Sheets for their board members and other interested parties. Fact Sheets often summarize information in an easy-to-read way. These documents organize information about the business, and provide a quick reference for other matters, such as legal issues, debts, financials, and more.

What documents are used after the meeting?

After meetings, it is wise for businesses to make sure that all Board Resolutions are recorded and filed in the company’s records. Also, it is a good idea for meeting minutes to be distributed and all meeting documents be securely stored. While usually not legally required, other documents to consider using after a board meeting include:

  • Action items for board members or corporate officers to follow up on.
  • Post-meeting surveys to ask for feedback so future meetings go well.
  • Compliance documents that federal or state law may require.
  • The next Notice of Meeting.

It is important to properly maintain corporate records like the ones mentioned above, so a business does not run into legal, tax, or financial troubles. Good record-keeping can also help your business maintain accountability, grow, and look good to potential investors, partners, or buyers.

If you have legal questions or need help conducting effective board meetings, reach out to a Rocket Lawyer On Call® attorney for affordable legal help.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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