Sharon Ditchburn

The Art and Science of Writing Board and Committee Minutes

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• Time will be allocated in the end for the speaker to address your questions

Your Speaker – Sharon Ditchburn• Qualifications

– LLB & Certified Practising Accountant– MBA specialising in Corporate Governance &

Entrepreneurship• Representation

– Member, Australian Institute of Company Directors– Member, Mudara (Institute of Directors)– Fellow, Institute of Chartered Secretaries & Administrators

(UK)– Fellow, Chartered Secretaries Australia– Member, Australasian Compliance Institute– Member, Steering Committee of ICSA Gulf Forum– Member, Australian Society of Certified Practising

Accountants– Member, Association of Certified AML Specialist (USA)– Distinguished Fellow – Hult University

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1. Legal requirements and liability2. Taking minutes and format3. Dissent and special director issues4. Technology issues5. Approval, amendments and mistakes6. Following up7. Retention/destruction, storage and control8. Access to minutes9. Special issues

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Talking Points

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1. Legal Requirements

Jurisdiction Law Meeting Requirements

UAE onshore Commercial Companies Law

PJSC AGM – Art 133

Names of shareholdersNumber of sharesNumber of votesResolutions made“Gist of discussion”

PJSC Board meetings – Art 108

Minutes entered into a special registerPresent Directors & Secretary to signDissenting Director may enter objection

LLC AGM– Art 251 An adequate summary of minutesEntered into special register at HO

DIFC Companies Law No.2 of 2009

All – s.72 “Cause minutes of all proceedings”Enter into “books kept for that purpose”Names of Directors presentOnce signed, is evidence of proceedingsDeemed duly held and proceedings duly taken place

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Damas extract - DFSA E.U. 2010

REMEMBER:

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• The WHOLE Board is (prima facie) responsible for the recorded discussions and decisions, so take care to record them properly, promptly and succinctly!!

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2. Good Minutes will: Have resolutions which can stand on their own and still

make sense years later Evidence that directors have fulfilled their duties to make

proper actions and decisions Appropriately record issues on which the board

disagreed or could not reach a decision Evidence compliance with the applicable laws,

regulations and codes Have few amendments in draft stage Enable management to understand and rely their

instructions

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Format (1)

Type of meeting Location, date and meeting number Attendees, including:

Status Style and duration of attendance

Open and closing times (even if different to notice/agenda)

Quorum, movement in/out of meeting (including directors/attendees, time)

Major headings Sub parts for separation of issues Numbered paragraphs for ease of reference

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Format (2) Acronyms and Initials Proposed resolutions

ALWAYS have in “draft” form so as to not legally pre-empt the meeting

Voting and absentions should be recorded Signatures – depending on legal requirements Resolutions 4WH – What, Why (limited), When, Who, How Agenda/Board Packs

Minutes should cross-reference clearly with Board packs Minutes follow the course of the meeting, do not re-arrange to

follow the agenda/board pack

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During the Meeting Clarifications

Do interrupt politely to ask the Chairman or Directors during the meeting to clarify any terms or issues

Order of meeting If the same issue is repeatedly discussed, note in the minutes that

the issue from section xx was revisited and further discussions held.

Addition of items to the agenda New issues/documents may be added to agenda items. Do make a note in the minutes, including reason for late addition

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Recording decisions when information is incomplete

Conjecture / Guesses by the Board Board may specifically record where information is lacking and

reasons why, and state whether or not they believe it is appropriate or required to make a decision

Board will discuss the likelihood/risks of taking such decisions – debate remains over how much to record

Request for more information Do record what additional information is requested by the

Board, as this will be critical for follow-up and accountability. Determine if a subsequent meeting/circular is required.

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Practical Writing Issues Style

Written in the third person Objective and not personalised Limit reference to individuals.

Timing Budget around the same length of meeting to write the final minutes First draft around 3-5 days after the meeting Take care with words such as “adjourned”

Fact checking DO NOT duplicate board pack information Fact check with management whilst writing the minutes, but do not

adjust minutes if management made a mistake in the meeting

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Communication to Management Immediate

Management usually in attendance so know decision, may wait for formal communication

Chair sometimes requests a resolution list immediately after meeting, which is signed and distributed – difficult to achieve for “normal” meetings

Drafting of resolutions in advance

Usually deferred until draft minutes are relatively certain,

May have a “deemed approved” period CEO or Company Secretary may have formal communication

process, although usually by email now

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Dissent & ObjectionsJurisdiction Law Meeting Requirements

UAE onshore Commercial Companies Law

Board meetings – Art 108

Minutes entered into a special registerPresent Directors & Secretary to signDissenting Director may enter objection

Art 112 Dissident directors held harmless if they enter objection in minutes.Absent directors held liable unless proven not aware or not able to protest.

Conflicts of InterestJurisdiction Law Meeting Requirements

UAE onshore Commercial Companies Law

Board - Art 109 Notify conflicts of interest and enter in minutes

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Recording Dissent, Conflicts & Unusual Situations

Good Boards/Chairs promote active discussion and debate, not all of which needs to be verbatim recorded

Conflicts of interest MUST be recorded Board’s decision on treatment, absence from discussions, and

voting exclusion/abstention

Purposeful Dissent

Ongoing dissent Liability: today’s dissent may be reversed by agreement or lack

of action tomorrow, so dissent may not be “forever”.

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Electronic Aids Recorders – voice, video, web Best practice – NOT advisable Benefits:

Technical conversations Long intense meetings

Dangers Treatment

Consent from all participants Acknowledgement that only 1 recording being made

Technology issues

Tendency to fail at critical times, so never assume that the recording is working – ALWAYS TAKE MINUTES

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Amendments and Mistakes Amendments without subsequent resolution ONLY for

clerical errors (eg, typos in names)

ALL other changes must be acknowledged in subsequent Board meetings, and fresh resolutions made. Cannot re-interpret the past

Do NOT allow standards to slip – once you allow changes, it creates a “new line in the sand” which will only create problems

Extracts Usually for quick moving items, eg, bank signatories

Generally from approved minutes Specifically note that the document is an extract, with the meeting

details Preference to include the written section in “ “ and include the original

paragraph numbers

If minutes not yet approved, seek Chairman’s approval before sending

May be suitable for Company Secretary to sign

Retain a copy with the Minutes

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REMEMBER: Much of what goes on in the Boardroom, STAYS in

the Boardroom….

Not to be recorded: Heated discussions Personal disagreements and power struggles Complaints about being out-voted Person by person statements, unless agreed Libellous statements Jokes, gossip, inappropriate terminology/statements Admissions of liability Second language conversations ??

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Access to minutes

Jurisdiction Law Meeting Requirements

UAE onshore Commercial Companies Law

PJSC AGM - Art 170

Shareholder may inspect “company books and documents” permitted by the Board or AGM.Court may instruct specific information not detrimental to Co’s interests

LLC AGM – Art 251

An adequate summary of minutesEntered into special register at HO

DIFC Companies Law No.2 of 2009

S.72 Shareholder access to shareholder meeting (GM) or class minutes

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Approval and Follow up

Minutes approved in the following meeting

Resolution registers Electronic board portals - GOOD Share point systems - OKAY Excel spreadsheet with action headings – OKAY

Accountability for each resolution should be clear, and that person is responsible for updating the Board

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Storage, Retention & Data Protection Storage

Head office, registered office – originals, in format as per law (book, sleeves, etc), number control

Other – electronic/physical copies but under control HINT: always work with copies, never take originals out of the

main storage

Retention Unlimited years for signed minutes Immediate destruction of drafts, recordings, etc. Keep separate from Board Packs, Shareholder meetings and

other

Data Protection laws will apply – personal data

Thank You