Board Minutes

What are minutes of meetings of the board?

Minutes of the meetings of the board, or simply “board minutes” are the official notes from any meeting of the board of directors in a company. The main purpose of the minutes is to record any resolutions taken by the board. The board minutes are prepared and signed by a member of the board, or a board secretary in case the board has appointed a board secretary (which is common in large listed companies, but uncommon in small and medium sized companies). The board minutes are then approved and signed by the chairman of the board (unless the chairman has authored the minutes in which case he/she will have already signed it), and one other board member, often referred to as a “verifier of the minutes”. 

In cases where a board meeting is held “by circulation”, or “per capsulam” as it is also called (i.e. where the board has not actually convened but a resolution is taken by way of written procedure), the minutes are signed by all ordinary board members. 

When should you use Board Minutes?

Minutes of meetings of the board should be prepared after each board meeting. Through the minutes, it is established which board members attended the meeting, which formal resolutions were adopted, how each board member voted in relation to each resolution, and if any board member was restricted from voting due to a conflict of interest.

Why are Board Minutes important?

Pursuant to the Swedish Companies Act, the board of directors are responsible for the organisation of the company and the management of the company’s affairs. As such, it is important that resolutions and decisions taken by the board are properly recorded in meeting minutes. As mentioned above, the minutes list the board members in attendance, and how they voted (in case of disagreements), allowing readers to ascertain whether proper quorum was established (i.e. allowing the board to make formal decisions), and if any board member voted against a resolution. The latter is very important as the members of the board may, albeit in very specific situations, become personally liable for a company's debts. For instance, such liability may arise when half of the company’s registered share capital has been depleted and the board fails to enter into liquidation proceedings as required by law. In such cases, a board member who actually voted for entering into liquidation proceedings as required but was overruled, may avoid such personal liability.

What are the common pitfalls of Board Minutes?

It is hard to go wrong with board minutes, as they should simply reflect what was discussed and resolved at the board meeting. However, the failure to record differing opinions and votes is common, as well as failure to record a conflict of interest of any board member (restricting such board member from voting). It is also common to confuse “ordinary” board meetings with meetings held by circulation (per capsulam). The meeting minutes must specify whether the board meeting was held by circulation (per capsulam).