Practical Hints for Effective Board Papers
Part III a: The Board’s Minutes - fundamentals
By Sue Hart and Neil Primrose
Introduction
Effective board papers reflect the wisdom of the board members and the relationship
between the board and the CEO, and her/his management team. The board needs to take
command of the quality and style of the support it requires from the CEO and her/his senior
team. In the main, boards get the quality of support they deserve.
Role of the minutes in contributing to the style/tone of the meeting
The agenda sets the scene for the meeting and guides expectations about what is to be
achieved. The agenda papers set the tone and intellectual depth of the meeting. The
minutes not only record what has been achieved, but also reinforce the culture by which the
Board has decided to work. They reflect the way the meeting was planned and conducted.
It is, therefore, essential that all the members of the Board have clear and regular input into
the style and content they want in their minutes.
The discussions about style and tone should be recorded. The processes by which the
record is developed and cleared, meeting-by-meeting, and the content of the minutes
themselves have a significant impact on the way the members of the board work together as
a team.
The arrangements for taking, clearing and distributing the minutes should have a central
place in the board‟s charter.
Purpose of the minutes
The Minutes of the Board‟s meetings have three purposes:
•
They represent the corporate memory of what was decided and why, including who is
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responsible for implementing the decision, and the timeframe for action to be completed;
• They are authoritative information for the board‟s committees and for the management
team about action they have to take; and
• They are a formal record of the board‟s work that is required by the Corporations Act (in
Australia) for the purposes of accountability (including to the courts).
This means that the minutes don‟t have to be a „blow-by-blow‟ journal of who said what.
How much/little detail? The criterion of ‘Sufficiency’
It‟s up to the Board to consider and determine the style of the minutes that best serve the
circumstances of the Board members and the level of detail that members want to have
recorded. „Sufficiency‟ then becomes the criteria. This should be reviewed at least annually
as part of the process of evaluating the Board‟s performance and reviewing the Board‟s
charter. Regular feedback, including praise for a job well done, should be provided to guide
the Board Secretary.
The bulk of detail upon which a decision is made will usually be contained in the agenda
paper that is put to the board for each item. The minutes then need only summarise any
additional issues. If the final decision was different from the recommendation contained in
the agenda paper, the minutes should record the actual decision, along with who is
responsible for implementing it and the timeframe for action.
When the board has considered a complex issue, it may also be helpful for readers at a later
time to know -- in addition to what was decided, why the board decided as it did. The intent
here is to demonstrate to the reader that the decision was rigorous and reasonable in the
circumstances.
For coverage of the present debate about whether fuller or briefer minutes are better in the
event of legal proceedings, see Kiel, G.C. and Nicholson, G.J., 2003, Boards That Work: A
New Guide For Directors. Sydney, McGraw Hill, p. 164.
Minutes styles
Minute writing styles vary enormously and suitability for particular board circumstances
needs to be determined by the members of the board. Some members will like tabular style.
Some will prefer prose. This is a matter to be discussed by the board team and settled
according to what works best for the people involved. A good Board Secretary will be able
to suggest a range of options for consideration.
As the board year progresses, the extent to which the agreed style is meeting the needs of
its members can be reviewed and changed if necessary. Similarly, the board will decide if it
wants to be provided with hard copy of documents, or if it prefers to work on-line. The latter
transfers the cost of printing to the recipient and, if board papers are voluminous, some
financial recompense to members may be warranted to offset that cost.
Distribution of the minutes
The board needs to decide from the outset who is to receive the record of its meetings. A
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balance needs to be struck between confidentiality and promoting to those who are
responsible for implementing the board‟s decisions, a clear understanding of what was
decided. The latter would suggest wide distribution to the management team. The former
can always be provided for, where necessary, by placing material “for the eyes of board
members only” in a confidential attachment.
Providing for clarity of communication becomes increasingly important as the proportion of
executive directors on boards reduces, notably given the trend to removing executive
directors entirely. Sharing the minutes with the senior management team undergirds a
relationship of respect, candour and confidence between the board team and senior
managers, as well as ensuring clear communication. The effect of the esteem that sharing
the minutes implies is not to be under-rated in generating a reciprocal esteem from
management to the board.
The responsibility befalling those who receive the board‟s minutes to respect and protect
confidentiality forms part of the conversation that the two teams need to have as they settle
how they are going to work together. A protocol for handling the material and passing on
guidance to subordinates then needs to be included as part of the board‟s charter.
Sue Hart, of Commerce Management Services Pty Ltd, is a professional company secretary. Neil Primrose of
Primrose Solutions Pty Ltd leads the Yellow Edge/BoardWorks Board Performance Assessment Service in
Australia. Neil and Sue operate out of Canberra.
Dr. Neil Primrose FAICD FAIM runs a consulting practice in Canberra advising company boards and
management teams about effective performance, good governance, team building and business planning. He
teaches with the Australian Institute of Company Directors and chairs the Action Agenda Co-ordination Group of
the Canberra Business Council.
From Good Governance 58, July - August 2007
 BoardWorks International (Australia) Pty Ltd