Something that seems so simple as taking minutes of a meeting always raises many questions. Is there an obligation to take minutes? Do you have to take extensive or rather concise minutes? Can you suffice with a list of resolutions? Who determines what is and is not included in the minutes? I will discuss some of these questions below.
Minutes of a meeting of a Supervisory Board or a Management Board are not mandatory (unless the Articles of Incorporation say otherwise), but they are necessary. The minutes are a report of an earlier meeting. They serve as a summary and mnemonic. They also serve as a guideline for action and as evidence of resolutions passed. So, minutes have an important practical and legal significance for every board. If you do not take minutes, you are an amateur. Meaningless minutes, only copying the agenda of the meeting, are pointless. Just like an endless, verbatim report of what has been discussed, including all nonsensical stories. Taking good minutes is a skill. The chairman of the Supervisory Board or Management Board needs to take responsibility for the content and quality of the minutes. It is his duty to see to it that the minute taker reflects the resolutions correctly and that actions formulated are clearly described and can be followed up on adequately. This is a duty that is often underestimated. The content and form of the minutes are often copied from the past. “We have always done it like this.” Or the minute taker determines the form. You should try to avoid that. It is important to regularly verify whether the minute taking method is in line with the wishes of the members of the Supervisory Board or Management Board.
The minutes often follow the order of the agenda and in that case the well-known principle “garbage in, garbage out” applies. If the agenda has not been properly prepared, the meeting will not go well either. The minutes should state at least what resolutions have been passed and what actions have been formulated regarding each of the items discussed. At the end of the discussion of each item, the chairman of the meeting explicitly has to put the relevant resolution to the vote and establish whether and that there is a majority. If an action is formulated, the chairman has to summarize it and establish who is responsible for that specific action. If the chairman fails to do so, the minute taker has to figure it out himself and that can create all kinds of – easily avoidable – uncertainties and complications.
Depending on the type of meeting and the complexity of the topics discussed, composing a list of resolutions may suffice. Sometimes it is necessary to give a brief explanation per resolution of the most important points that were addressed in the deliberations. This makes it possible to reconstruct the decision-making process in retrospect. In small organizations, the secretary can usually take the minutes. The disadvantage is that taking good minutes requires high concentration and therefore the possibilities of the secretary participating in the discussion are limited. That is why large organizations often appoint a separate minute taker. This person does not participate in the deliberations. The minute taker should have sufficient training to be able to record and summarize the complexity of what is discussed. Cutting back on minute taking is usually ill-advised.
In the next meeting, the minutes are confirmed. This is merely to verify whether the content of the resolutions has been reflected correctly. Confirming minutes is a formal decision. However, the resolutions recorded in them already have legal effect from the moment they have been passed. The chairman of the meeting is not authorized to confirm the minutes unilaterally or independently, unless the Articles of Incorporation explicitly provide for it. If the Articles of Incorporation or regulations state that the chairman and secretary both sign the minutes, this does not mean they also have the power to confirm the content. In principle, this is always a power of the Supervisory Board or Management Board itself. Besides, if the chairman would confirm the minutes independently, the legal consequence is limited. A member of the Supervisory Board or Management Board can always state, if he does not agree with how the resolution has been recorded, that the relevant resolutions have been reflected wrongly. However, he should be able to make it plausible. And, if the other members of the board who attended the meeting support the chairman’s interpretation, no further discussion will be conducted. In that case, you can demand your deviating opinion or view to be recorded in the minutes. If this is refused, it would be in conflict with Article 2:7 of the Civil Code: the persons and bodies involved in the legal entity have to act towards each other in accordance with the rules of reasonableness and fairness. So, act decently. It will be recorded in the minutes.
Do you have a question about corporate governance yourself? Please e-mail it to firstname.lastname@example.org and perhaps your question will be discussed in the next blogpost.