Minutes of a meeting are the only record of what took place at a meeting and the importance of having good quality minutes cannot be underestimated.
It is becoming increasingly clear that properly prepared minutes can provide the entity and its board members with meaningful protection against certain liabilities, while inadequate minutes increase legal exposure. Given the regulatory pressures of corporate responsibility, traditional approaches to minute-taking may no longer be sufficient to serve the interests of the entity and the board.
The fundamental role of corporate minutes is to preserve an accurate and official record of the proceedings of a board or committee meeting. Well-kept corporate minutes serve as a record of corporate decisions, reflect director dissent where appropriate, offer guidance for future board action, serve as a valuable source of contemporaneous evidence in regulatory or judicial proceedings and reduce misunderstanding as to the intent of the board. Corporate minutes can document compliance by board and committee members with their fiduciary obligations. Furthermore, the maintenance of accurate, thorough corporate minutes is consistent with the emphasis on greater accountability and disclosure.
Poorly kept corporate minutes deny the board a potentially dispositive resource from which to defend their conduct or to explain the full nature of a board decision. In addition, regulators and other plaintiffs will seek access to corporate minutes to bolster their arguments, and courts themselves will give substantial credence to the contents of minutes.