Business readiness

Board Meeting Documentation

What is Board Meeting Documentation?

Board meeting documentation refers to the following documents for each board meeting held:

  • Meeting agenda
  • Board pack, attached documents, addenda
  • Minutes of the meetings
  • Board resolutions.
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Why is Board Meeting Documentation important for business today?

Having comprehensive, up-to-date and accurate documentation of board meetings provides the following benefits:

  • It provides clarity to management on what has been decided at board meetings
  • It provides clarity on what information has already been presented to the board in the past
  • It provides clarity as to the style of information and method of communication the board likes to see and expects from the management team that prepares documentation for board meetings
  • It provides evidence of the deliberations that have occurred at board meetings, subject to any confidentiality policies
  • It provides a body of evidence that helps directors to demonstrate how they have satisfied their directorship duties which will be very important if there is litigation

Pros of Board Meeting Documentation

  • Clarity of board decisions
  • Clarity on board’s existing knowledge
  • Clarity on the style of information the board likes to see
  • A record of deliberations that have occurred
  • Support for performance of director’s duties

Why is it Important for an Event Tomorrow?

Reviewing board meeting documentation is a very important part of an equity investment due diligence process for two main reasons.

  • Firstly, it provides a useful source of summary information on key topics:
    • The management team needs to provide the board with briefings on the performance of the overall business as well as on significant projects and issues
    • Given directors have limited time and are not necessarily experts in the relevant field, this documentation needs to be clear, concise and readable by a layperson
    • Investors conducting a due diligence process are similarly time constrained and may not have much background knowledge of the issues so this type of documentation is very suited to their needs as well
  • Further, it provides an additional layer of comfort that all key issues have been identified in due diligence:
    • Management have a requirement to report to the board on any significant issue that has arisen either as part of a specific one-off briefing or as part of their regular updates
    • Therefore potential investors will gain comfort by seeing that no additional material issues were communicated to the board in the past beyond those already identified by the vendor in the summary documentation already provided, for example in an information memorandum.

Cons of Not Addressing this topic

  • Potentially inconsistent and poor quality communication to the board
  • Potentially exposes directors to law suits by not having A robust body of evidence of the information they have received, their deliberations and decisions
  • Greater potential for actions to be taken by management in contradiction of board decisions.

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