Board resolutions are a formal method to record the decisions taken during a board meeting. They guarantee that the decisions taken are in line with federal, state and local laws and regulations. They also help to minimize any legal risks that might result from these choices.
The decision being considered is as minor as a change to employee work hours or as major as shutting down a company the board should have a record of the decision. The board must also be able of demonstrating the rationale http://fishboardroom.com/how-to-run-an-effective-workshop-and-board-of-directors behind the decision so that any outsiders can understand the reasoning behind it and whether it was the right decision.
The process of writing a board resolution can be an intimidating task. However, by learning about the purpose behind these documents and utilizing the right tools for composing them you can make the process much easier.
What is a Board Resolution and how do you write one?
The board must document significant decisions affecting shareholders or the company in a formal way. These decisions are referred as resolutions of the board and assist to establish clear guidelines regarding issues like governance, ethics and risk management. They also serve to demonstrate the board’s commitment to transparency of the corporate structure.
Board resolutions are approved during a meeting of the board or more recently, via written resolutions. When a written resolution is created it must begin with an “WHEREAS” that outlines the subjects that were discussed during the board meeting. Then, the resolutions are added. The document must be signed by every director who attended the meeting.
