Chapter 11 - MINUTES

Question 1

For what meetings must minutes be taken to record proceedings, resolutions and decisions according to the Companies Act?

Answer 1

Meetings of directors
General meetings of members
Sole decisions of a member / class

Question 2

What three key things must be recorded in minutes to ensure effective governance?

Answer 2

Meeting proceedings
Resolutions
Decisions

Question 3

Does the Act require for Companies to record and keep minutes of Committees?

Answer 3

No - not clear

NOTE: Most Company Articles will include this requirement - it is good practice to do so.

Question 4

What is a consequence of a failure to record one decision of the Board or Members?

Answer 4

It may affect or invalidate a consequential decision of the Board or Members

Question 5

Does the Act make provision for directors to
take decisions by written resolution ?

Answer 5

No - any such authority will derive from the Articles or under common law.

Question 6

Does the Act stipulate a required style, content and format of the minutes?

Answer 6

No - it is up to the company to decide for themselves.

Question 7

Provided the minutes have been properly recorded then until the contrary is proved the meeting is
deemed duly held and convened, the proceedings to have taken place and any appointments made at the meeting aredeeme d valid (CA2006 s. 249(2)).

Who reviews and who approves the minutes of meetings of directors?

Answer 7

The Chair; the Board

Question 8

Where decisions are taken by written resolution there will of course be no minutes but instead one or more copies of the resolutions - what signifies directors’ consent?

Answer 8

Signature by each director

Question 9

What SEVEN key static data items are usually present in the minutes according to best practice??

Answer 9

• company name and registered number (registered number is useful where the company subsequently changes its name);
• place, date and time the meeting commenced;
• attendees (indicating which part of the meeting was attended by those not present for the whole meeting);
• identity of the person chairing the meeting;
• confirmation that a quorum is present;
• declaration of any specific potential conflicts of interest in matters to be discussed or changes of general potential conflicts of interest; and
• time meeting closes.

Question 10

For members’ meetings - do conflicts of interest need to be recorded?

Answer 10

NO

Question 11

For large members’ meetings - do all attendees need to be recorded?

Answer 11

NO

Note: sometimes company names and number of attendees from each may be noted; in other cases a quorum will simply be stated.

Question 12

Name some examples of variable data / information that is usually present in minutes.

Answer 12

Variable data includes:
* matters brought forward and action points from previous meeting(s);
* review and approval for signature of minutes of the previous meeting;
* discussions on matters on agenda, actions points, decisions made;
* matters to be carried forward and action points; and
* any other business not on the agenda.

Question 13

The Six Cs - explain CLARITY

Answer 13

Minutes should be clear and neutral.

Question 14

The Six Cs - explain COHERENCE

Answer 14

Minutes should be consistent in tone and grouped appropriately by topic / agenda point.

Question 15

The Six Cs - explain CONCISENESS

Answer 15

Minutes should be a concise record of the meeting. While nothing material should be omitted, there is no need to repeat the same point several times – even if that actually happened during the meeting.

Question 16

The Six Cs - explain CONSISTENCY

Answer 16

Minutes that are written in a consistent style and tone will be much easier to read and be understood.

Question 17

The Six Cs - explain COMPLETENESS

Answer 17

Each section of the minutes should be complete showing the discussion and the decision reached, whether that is that the item was approved, not approved, deferred pending additional clarity or results of some testing until a later date, simply noted or some other result.

Question 18

The Six Cs - explain CORRECTNESS

Answer 18

Minutes that are correct in terms of the language, technical terms, grammar and spelling, will be much easier to understand and allow the reader to concentrate on the meaning of the message rather than the message itself.

Question 19

Is the style and detail of a company’s minutes influenced by the business or the sector?

Answer 19

YES.

Simply recording any discussions
may not, however, provide sufficient detail and background to the decision, in particular, for listed or regulated companies, where the directors are often required to be able to demonstrate that they have fulfilled their duties to challenge decisions and consider their overriding duties to members and other stakeholders. Accordingly, the style and
detail of minutes will also be influenced by the business and sector of the organisation.

Question 20

Why should a record of votes for and against resolutions be maintained?

Answer 20

Recording the votes cast in respect of a resolution in the minutes is conclusive evidence of the vote unless a different result can be proved

Question 21

What is the purpose of keeping directors’ minutes?

Answer 21

To keep a permanent record of the decisions of the directors and ideally a sense of the discussions and reasons for any decisions reached

Question 22

What are the differing minute retention periods for meetings held before or after 1 October 2007?

Answer 22

Permanently and 10 years respectively

Question 23

What are the dangers of not keeping minute books secure?

Answer 23

Loss of confidentiality, total loss or tampering and alteration

Question 24

How long must a company keep its original, authenticated minutes?

Answer 24

Ten years

Question 25

Can minutes be used to demonstrate due diligence for regulators?

Answer 25

Yes, but never the primary source.

Question 26

What legal status is given to minutes of members and minutes of directors once they are signed as a correct record?

Answer 26

EVIDENTIAL STATUS

Evidential status is given to minutes of general meetings made under CA2006 s. 255 and signed by the chair as a correct record (CA2006 s. 356). These provisions are replicated for written resolutions of the members by CA2006 s. 382(A).

Such minutes, unless there is evidence to the contrary, indicate that:
* the meeting they relate to is deemed duly held and convened;
* all proceedings at the meeting are deemed to have taken place; and
* all appointments made at the meeting are deemed valid.

NOTE: This evidentiary status is not afforded to written resolutions of the directors, as there are no provisions in the Act specifically authorising the directors to make use of written resolutions; unlike the position with written resolutions of
members. However, the Model Articles do require copies of unanimous or majority decisions of the director to be retained and this clearly also includes written resolutions.

Question 27

Can minutes be signed in hard copy, scanned and the original subsequently destroyed?

Answer 27

YES.

The minutes will still be accepted as evidence - in line with the British Standard code of practice for legal admissibility of information stored electronically.

Question 28

Are minutes discoverable in legal proceedings?

Answer 28

Yes, unless marked as privileged.