Board directors carve out time from their busy schedules to attend board meetings with the expectation that board meetings will be on time, well-run and productive. Boards that implement best practices for governance improve the quality and functionality of their meetings. Best practices for good governance guide boards on how to work as efficiently as possible without sacrificing ethics and integrity. Board management software programs streamline many of the regular board processes so that boards can spend adequate time on higher-level functions.
Best Practices for the Board Meeting Agenda and Supporting Materials
It takes a bit of pre-planning to make sure board meetings follow best practices and come off without a hitch. A few of the things that meeting planners need to pay attention to are notice, structure and agenda.
A corporation’s bylaws may or may not state the length of time that boards need to give proper notice. To comply with best practices, boards should always give formal notice of a meeting via written or email correspondence. Best practices also mean that boards should give reasonable notice.
Give board directors plenty of time, at least a week before the meeting, to get the agenda and supporting meeting materials out to board directors. A week should give board directors enough time to read all reports and properly prepare for the matters contained in the agenda. Last-minute board packets can lead to ad-hoc discussions that take the meeting off track and result in rushed, uninformed decisions.
Include the following information on the board agenda:
- Date, time, location of meeting
- Type of meeting — special, regular, annual, executive
It’s also considered best practice to include a waiver of notice, which is a statement where a board director can sign off that they agree and consent that any business transacted at the meeting is valid and legal even if they’re not able to be present.
The agenda sets the structure and time limit for board meetings. It should be as short and as concise as possible while containing all pertinent information. Agenda preparers should strive to keep it to one page.
How to Structure an Agenda for Board Meetings
Boards usually need to allow time during board meetings for routine matters, as well as important and emerging issues. Identify routine items and items that require little or no debate. Place those items at the top of the agenda so boards can get to more important matters more quickly.
Best practices suggest that boards should spend about 75% of meeting time on big issues and areas where corporations need advice and guidance. Substantive issues include items like business decisions and resolutions.
Boards need to make their resolutions clear because they will often need to rely on them in future circumstances when they need to establish a fact pattern.
Agenda preparers should accompany each substantive item, such as financial reports, operational reports, personnel reports, new opportunities or potential risk issues, with additional supporting materials. Boards should also take meeting time to review short- and medium-term corporate objectives.
The agenda may outline approximate timeframes for each agenda item so that meetings don’t run over.
Managing the Board Meeting According to Best Practices
In addition to having a solid agenda, board meetings run well when they have a well-prepared board chair. Best practices require board chairs to prepare for board meetings ahead of time. They should do a dry run through the agenda to ensure that they have a plan for managing the agenda items if it looks like the meeting will run over.
Board chairs need to follow the agenda closely and keep meetings moving along smoothly. Managing meetings according to best practices means that board chairs need to know when to table agenda items or move them to a committee for further exploration.
Board chairs should know and follow good governance principles. This requires knowing and following the bylaws, following rules for a quorum, making voting rules clear and requiring disclosures of any conflicts of interest. Best practices require board directors to be active participants and to respect input from their fellow board directors. Board chairs are responsible to ensure that these practices are occurring.
Board chairs who arrive at meetings ill prepared will quickly lose the confidence of the other board directors. When board chairs aren’t careful about following rules and bylaws, the board’s resolutions and motions could be deemed invalid.
Best Practices for Board Meeting Minutes
Meeting minutes provide an official and legal record of board meetings. Minutes serve an important purpose for former or potential stakeholders when there is an investigation of board actions and decisions. Minutes are also discoverable in court proceedings and may be used as evidence.
Minute-takers should pare minutes down so that they reflect only high-level overviews of each agenda item.
Best practices for meeting minutes suggest that boards should discuss having a policy that requires the board to destroy all notes and other records that don’t form part of the final meeting minutes. This will alleviate the potential for non-official minutes to be used as an account of a board meeting in a legal or other type of proceeding.
Best practices don’t specifically suggest that boards should be using a board management software system; however, software tools like a board portal and software programs for Messenger and Minutes, create the perfect environment to support best practices for board meetings, agendas and minutes.
Diligent’s board portal is a secure platform for creating agendas and board books. With unlimited, cloud-based storage for confidential documents and reports, board directors can access the most current forms of documents in real time. Boards save time in delivering board packets, which helps board directors arrive at meetings well prepared and ready to go to work.
Diligent Minutes allows minute-takers to create and publish meeting minutes shortly after the close of board meetings and submit them for approvals while the meeting discussions are fresh in their minds. This also saves time on the next meeting’s agenda. Board directors can access documents offline and using mobile devices.
Diligent Messenger provides for secure communications and collaborations by containing them inside the board management software platform.
In following best practices for board meetings, boards need to factor in several components. Board chairs should consider best practices as they pertain to the agenda, meeting minutes and meeting protocols. In addition to Minutes and Messenger, Diligent designed a fully integrated suite of governance tools called Governance Cloud to support every facet of board business.