Board minutes: ICSA guidance on minute taking

Practical Law UK Legal Update w-003-5110 (Approx. 5 pages)

Board minutes: ICSA guidance on minute taking

by Practical Law Corporate

Background

On 25 May 2016, ICSA published a consultation on the practice of minuting board meetings (see Legal update: archive, Board minutes: ICSA consultation on the practice of minuting meetings). The consultation paper noted that board meetings are only lightly regulated by statute and by regulation and asked for views on the principal function of meeting minutes. ICSA sought views on its position that organisations should appoint a properly qualified company secretary and that the secretary is responsible to the chairman for the preparation and retention of minutes.

The guidance has been produced on the back of feedback to this consultation and discussions ICSA has had with representatives from the corporate and not for profit sectors. It is noted that there is considerable sectoral variation and each sector is likely to have its own code of governance of which boards should be aware and have regard to.

ICSA guidance on minute taking

The guidance is principles-based and not prescriptive; it covers the following areas:

The purpose of minutes.
Responsibility for minutes.
How to prepare minutes and the style and content of the minutes.
How draft minutes should be approved and edited.
Who should have access to minutes and how long they should be retained for.

The last section of the guidance provides a summary of key points.

The purpose of meeting minutes

The purpose of minutes is to provide an accurate, impartial and balanced internal record of the business transacted at a meeting. The degree of detail recorded will depend on the needs of the organisation, the sector in which it operates, the requirements of any regulator and the working practices of the chairman, the board and the company secretary. Minutes should include the key points of discussion, decisions made, where appropriate, the reasons for them and the agreed actions. Minutes should be clear, concise and free of any ambiguity.

Responsibility for minutes

ICSA regards the company secretary as being responsible to the chairman for the preparation and retention of the minutes. It is noted that it is not easy to take minutes and participate fully in a meeting. Therefore, the company secretary should be supported by a suitably skilled minute taker. It is a good idea for the person minuting to discuss with the chairman before the meeting any relevant procedural issues and how they can best support the chairman. For large groups of companies, it may be helpful to have a minute-taking policy or style guide to ensure a consistent approach.

Preparing minutes

The guidance note sets out what preliminary information should be included in the rubric of all minutes. A quorum statement will usually only be necessary where there were a lot of absences or the company has a high quorum requirement.

ICSA suggests that it is up to each organisation as to how they decide to deal with conflicts of interest at board meetings but in their view, conflicts of interest should only be referred to in the minutes where:

The chairman or another board member raises the issue of a conflict.
A potential or actual conflict of interest is declared.
A conflicts register is circulated, tabled or reviewed as part of the meeting or it is necessary to amend the conflicts register.

Style and content of minutes

How exactly the minutes are written will be a matter of style and practice for the organisation but ICSA recommends:

Minutes should be in reported speech format.
It may be appropriate to name individuals in certain circumstances, for example where they are presenting a report to the board, have declared a potential or actual conflict of interest, abstain from a vote or are the subject of personnel issues under discussion.
Minutes should not be a verbatim record but should summarise key points and focus on the decision. The reason for the decision should be documented and include sufficient background information for future reference.
Minutes should allocate actions as they provide evidence of discharging duties, ensure accountability and that agreed actions are not overlooked.
Board papers should be retained but not with the minutes.
Minutes should facilitate regulatory oversight but should not be drafted with this primarily in mind.
Dissent should be recorded but how is a matter of organisational preference.
Legally privileged advice may be discussed at board meetings but the minutes should clearly separate the privileged discussion from the rest of the minutes and mark it as private and confidential. Any decisions taken as a consequence of the deliberations around the privileged advice will not be privileged.
It may be helpful to record any breaks or interruptions in the minutes and for the chairman to draw attention to any pre-meeting comments received from board members who were unable to attend.
When drafting subsidiary board minutes, directors should be careful that they are promoting the interests of the correct company.

Draft minutes

Draft minutes should be circulated to attendees as soon as possible after the meeting and be clearly marked as draft. It is good practice to review technical content by specialist functions or executives. It is not normally appropriate to alter the original minute but it may be possible to add a post-meeting note, particularly to correct erroneous information quoted at the meeting but not to re-engineer the meeting to reflect post-meeting events.

The guidance discusses whether a conflicted director can review or access the minutes and much depends on the circumstances, including the nature of the conflict, the organisation's constitution and any relevant regulation. It should be considered on a case by case basis.

The draft minutes should be approved at the next board meeting.

Access to and retention of minutes

The guidance notes that there is sometimes a need for third parties to access board minutes and explains the ways in which third party access can be granted.

It is not recommended to publish minutes unless there is a legal or regulatory requirement to do so. The audio recording of board meetings is not, generally, recommended. Any such recording should be deleted once the minutes have been approved.

Whilst the Companies Act 2006 requires that board minutes must be retained for at least 10 years, ICSA recommends that they are retained for the life of the organisation. ICSA recommends that any written notes of the meeting should be retained until the minutes are approved and then destroyed. If the written notes are kept by the company secretary, these could be disclosable in any future litigation.

The guidance is available to download from the webpage upon registering with ICSA.

Sources: feedback statement and webpage.

Board minutes: ICSA guidance on minute taking | Practical Law