The systematic recording of the events, the decisions, and the proceedings of Board Meetings are important. Companies need to keep some things in mind. A corporate resolution should cover all the relevant aims of the company. It should be brief, to the point and informative. Since it can be used or referred to later on, it is necessary to file and record it systematically.
1. Design a corporate resolution form, which gives a comprehensive view of all the aspects covered at the Board Meeting.
2. It should convey the assertions of the Board of Directors in brief and effective words.
3. It should carefully note the voting results and the pattern of voting on each subject.
4. It must address the implementation of the decisions and the subsequent steps undertaken to comply with the decision almost as soon as these take place in order to avoid any lapses or deletion of these decisions.
5. The exhaustive recording of the corporate minutes is essential.
6. It should contain the hierarchical recording of the proposed resolution, the decision of the directors, and the subsequent accountability of the further implementation of the decisions.
7. Accurate recording of the decisions related to the dividends and the steps taken to reach these decisions is mandatory.
8. It should contain a detailed recording of the loans, taxes, and penalties paid. The recording should not contradict the related documents.
The Chairman of the board of directors is the person designated to preside over the meeting. In the case of the absence of the Chairman the company authorizes a Co-Chairman or the Chief Executive Officer (CEO) or some other director. The Board of Directors arranges the corporate resolution and its minutes with this person. The Board of Directors must decide upon the agenda of the meeting well in advance and notify all the participants accordingly. When the agenda and the minutes are recorded for the corporate resolution, care should be taken to avoid any deviation from the meeting.
An ideal corporate resolution consists of all the major aspects discussed above and consciously guides the future actions. To be effective it must not only record the proceedings and the basic intent of the board about any particular subject, but also give a glance into the future actions and the implementation of the resolution. Hence in the case of any future audit or inquiry, the company can interpret the decisions with precision. Also, the correct upkeep of the records is advisable according to the law and gives the company a cushion to fall upon when required.
The corporate resolution is a fine referral point for any future proposition, comparable to the older one. If a decision backfires the company can always refer back to the record of the resolutions to analyze the weakest link. There are software packages available for writing more professional and affective corporate resolutions.
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their
web site http://www.smallbusinessconsulting.com