Many people know that all decisions in the life of a company are made through board meetings. The result of such meetings is usually recorded in a certain type of document, most often in a resolution. However, there are many board resolution formats that are used to record a particular type of board decision. What are the basic types of resolutions of the board of directors, what requirements are imposed on them, and how to properly draw up a resolution of the board of directors, we suggest learning from our article?
How to draw up the results of meetings of the board of directors: several types of documents
The results of a meeting of the board of directors may be executed in the form of one of the types of resolutions depending on the subject and agenda. The most frequently encountered in company operations are:
- Ordinary decision. This is a document that records the results of voting on ordinary matters relating to the life of the company. Such decisions usually require a simple majority vote. Issues that can be passed by an ordinary resolution include personnel changes to the board of directors, the appointment of various types of payments, and more.
- Special resolution. It is used to make more significant issues-for example, changes to the company’s bylaws or capital, appointing or firing shareholders, and more. A regular majority vote is not enough to make decisions – at least 75% of the votes of those present are required.
- Board Resolution. This is a collective type of resolution that is used in place of a sole resolution by the director of the company. Most often, these are various resolutions that are in writing and are not always on the agenda.
Board decisions are made by voting, either electronically or by a show of hands. For meetings, questions are most often placed on the agenda.
How to draw up a board of directors’ resolution: an ordinary resolution template
It should not be forgotten that resolutions of the board of directors are an official document, which should comply with legal requirements and documentation standards. They should also have a unified structure, which usually consists of:
- The introductory part, which contains organizational information – the name of the company, the essence of the issue to be solved, the date and time of the meeting, and so on;
- The main part – the essence of the problem and the decision made on it;
- The final part is usually designed to fix the meeting participants and their signatures on the voting results.
If a company makes most of its decisions by voting on the board of directors, it makes sense to create a corporate board resolution template that can be used as a basis for voting. Such a template would only need to include information with each vote.
Since board resolutions are official legal documents, all necessary steps should be taken to preserve them. Recently, storing electronic copies of documents has become popular, with remote file storage facilities being used to store them.
The voting procedure should not be forgotten. Most often, decisions require a majority vote of the board members present, but some categories of issues – such as special decisions – require a qualified majority vote. Special decisions must also be sent to all board members, who can read the items and decide within 21 days. However, issues that require a special board resolution may take a little longer to discuss.