With strong governance being a top priority across industries, it is well known that a productive board is the foundation of a thriving organization. Accurate board meeting minutes serve as building blocks to valuable and actionable board meetings. Yet without the right system in place, key details can easily be overlooked during the recording process. Even a slight slip has the potential to create inefficiencies and increase risk, especially if minutes are called upon during legal matters. Following are three costly errors that are frequently committed when recording board meeting minutes.
Mistake #1: Failing to establish consistency.
A system for recording board meeting minutes that lacks continuity runs the risk of being unclear. For instance, minutes that are not approved on a timely basis, or recording processes that vary from one meeting to the next, can cause onlookers, whether they be shareholders or employees, to question a company’s intentions. In the case of litigation, inconsistencies in the recording of board meeting minutes may create a sense of doubt. A corporate board might be asked about accountability if note-taking procedures are not followed and documented on a regular basis.
Mistake #2: Not recording key action items.
After a board meeting takes place, there will be a line of follow up tasks, director to-do lists and other assigned items that need to be completed. Since these aren’t typically included in meeting minutes, they can easily slip through the recording cracks. Without a proper system in place to note action items, it becomes difficult to track next steps. This can cause confusion, making timelines for specific tasks unclear. It also generates disruptions when preparing for the next board meeting and prevents board members from being held accountable if they do not complete specific tasks or action items.
Mistake #3: Not having minutes reviewed for quality assurance.
Since minutes are maintained in corporate records and are legally binding documents, they can be called upon during legal procedures, audits or regulatory reviews. If the minutes have merely been recorded and not reviewed by a team of experts, they may lack specific language needed to provide accuracy and clarity, both of which are vital when records are being scrutinized. This risk can cause the company’s decision-making process and intentions to be questioned.
Does your board room have a best-in-class recording system? If not, you can begin to set your practices straight today. Download our white paper on The Art of Recording Board Meeting Minutes to help get your board firing on all cylinders.