Minutes of a meeting, whether that be of directors, shareholders or committees, need to adequately record the decisions made during the meeting. In this respect, a ‘happy medium’ needs to be achieved by a company by ensuring that the right amount of information and detail are included in the minutes to accurately reflect discussions as well as record processes and decisions.

Corporations Act
The Corporations Act requires that a company record, in its minute book, the ‘proceedings and resolutions’ of directors’ meetings (and meetings of any committee of the directors) within 1 month and that they be signed ‘within a reasonable time’ by either the Chairman of that meeting or the Chairman of the next following meeting (section 251A).

Recommended Content
In the absence of any prescriptive requirements, it is a matter for each company to determine what practice is adopted when preparing and recording minutes of a directors’ meeting, so long as they are an accurate record of the proceedings and resolutions.

It might be thought that there would be some degree of consensus in the views of commentators about what should or should not be included in minutes.
However, commentary on this topic is not entirely clear and can at times be quite inconsistent.

In general, commentary published by the Australian Institute of Company Directors and others (including the Governance Institute of Australia) indicate that minutes should at least:

– clearly identify the company, by reciting the full name and ACN/ABN of the company;
– describe the type and nature of the meeting, specifying whether it is a meeting of directors, or a committee of directors, and whether it is an ordinary, special or adjourned meeting;
– give the date, time and location of the meeting;
– set out the names of those present, the capacity in which they are attending (directors, alternates, observers, guests etc.), and the manner in which they are attending (e.g., physically or by remote access);
– set out the name of the chairperson;
– identify any apologies and whether or not they have been accepted;
– consider whether the minutes of the previous meeting are an accurate record of the proceedings and resolutions passed at that meeting;
– identify all material distributed before or tabled at the meeting;
– record the business of the meeting and the order in which the business is transacted during the course of the meeting;
– record all decisions arrived at by the meeting, including the precise language of all motions that are moved and any amendments, and whether the motions are carried or rejected;
– record the numbers voting for and against any motions, as well as any abstentions (e.g., due to a conflict or potential conflict of interests), although this is arguably only required when there is a requirement for a specified majority;
– record all appointments and the terms of appointment, particularly of committees, where powers are delegated; and
– identify when attendees leave or arrive at the meeting, or when they are temporarily absent, and identify when the meeting is adjourned or closed.

Conclusion
Beyond the minimum recommended content described above, it is a matter for directors to determine what level of detail about the reasons for their decision they wish to record in their minutes, bearing in mind:

– the risk that minutes may well be a liability as much as or more than an asset in any legal proceedings or investigations, particularly if they are incorrect or incomplete;
– the additional burden of ensuring that minutes are correct and complete, the more comprehensive they become; and
– that minutes are prima facie evidence of their content, in contrast to notes maintained by individual directors.

This is not an easy issue, but is an issue worthy of ongoing discussion and debate. Often, a good test is whether minutes are capable of telling an accurate story of all that is important about a meeting so that even many years later, people who have no familiarity with the events being recorded, are able to understand the events that transpired at the meeting, including the nature of the proceedings and the relevance and effect of the resolutions passed.

This article was written by Kathryn Martin, Senior Associate at Norton Rose Fulbright. kathryn.martin@nortonrosefulbright.com.

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