Minutes of your board’s meetings may seem like a mere formality; however they are much more than that. Board meeting minutes reflect on your board of directors and your organization’s actions. Savvy not-for-profit organizations do not settle for a passing grade when creating these documents, they go for the “top of the class.”
Here are some best practices for developing minutes that will document your meetings clearly and accurately:
Covering the Basics
Meeting minutes should cover such fundamentals as the date and time of the meeting, whether it was a special or regular meeting, the names of directors attending as well as names of directors who did not attend. The minutes should record any board actions, such as motions, votes for and against, and resolutions. The minutes also should note whether a quorum was reached, whether any board members left and re-entered the meeting, such as in the case of a possible conflict of interest, and whether there were any abstentions from voting or discussions.
Additionally, minutes should include summaries of key points from reports to the board and of alternatives considered for important decisions. For instance, describe how your board evaluated bids for the organization’s outsourcing IT work or chose a particular venue for a fundraising event. The minutes should record action items, including the follow-up work that will be needed and who will be responsible. All information in the minutes should be presented clearly and succinctly.
There is no particular requirement about how much detail should be recorded in your minutes. But many attorneys we work with often advise their clients to include enough information so that they can be offered as evidence that an action was properly taken and that directors fulfilled their fiduciary duties. When in doubt about the depth of detail to include in your minutes, consult your organization’s attorney.
At times, your board may meet in executive session to discuss particularly sensitive or confidential issues, such as a staff dismissal or key person salaries. Details of these sessions should not be included in the board meeting minutes, although a notation should be made that the board moved to an executive session. The notation should provide the general topic of the conversation. Also, it is important for you to be aware of your state’s Sunshine Laws that may require open meetings and outline exactly what must be documented. Again, your organization should consult legal counsel as necessary.
IRS Form 990 asks whether the organization “contemporaneously” documents the meetings held by the governing body and each committee with authority to act on behalf of the governing body. In this situation, contemporaneous means by the earliest of the next board meeting or within 60 days of the original meeting date.
Understanding Multiple Uses
If your organization is ever audited by the IRS, your meeting minutes likely are among the first documents the IRS will request to see. Keep in mind that any attachments, exhibits and reports can be considered part of the minutes.
Meeting minutes also can serve as evidence in court. For example, if someone alleges that the board made a hasty decision in cutting a program, board meeting minutes can be used to present the data that was considered when making that decision.
Many not-for-profit organizations today strive for transparency. However, your board is not transparent if the meeting minutes are so abbreviated that only the keenest insider can understand the full meaning. The person assigned to take minutes at your organization’s board meetings should prepare minutes that are a straightforward and complete report of all actions taken and the basis for any decisions. Simple and unambiguous wording works best.
With that goal in mind, it is a good idea to have a second person review the meeting minutes. That person, as well as the original writer, should ask, “Would this report make sense to someone who was not at the meeting and was unfamiliar with the issues addressed? Would it be easy to see the information provided and decisions made?”
Holding up Under Inspection
Always keep in mind that the minutes of your board’s meetings can be viewed by many sets of eyes. Be a scholar and make sure your minutes are properly and timely documented.
For more information, contact Jim Quaid at [email protected], or call him at 312.670.7444. Visit ORBA.com to learn more about our Not-For-Profit Group.