In the world of Internal Controls or GRC (Governance, Risk, and Compliance), there is tons more value we can extract from documentation and processes, but too many people leave that value on the table. And that’s where the topic of minutes comes in. They are obviously critical for corporate governance, but they are also an excellent teacher of documentation best practices.
So, let’s take a minute to talk about minutes.
In the corporate world, when we think of “minutes,” we’re often thinking about a company’s board and its committees. But the practices apply to many other types of meetings, including for management, projects, teams, or even your figure skating association or condo board.
Minutes are the official written record of a meeting – but that doesn’t mean they’re only for formality’s sake. They keep a record of decisions made and, like all documentation when done well, are essential for driving projects and transactions forward. When they are treated as a valuable tool, minutes help teams solve and avoid problems, too.
Two Simple “Rules” to Guide All Your Minutes
I am not a lawyer or a Corporate Secretary. But over the last 10 years, I have reviewed thousands of minutes for my clients, where board, committee, and business unit minutes are key not only for decisions made, but also as evidence for supporting our clients’ control environments, due diligence, and oversight.
While there are lots of other minute best practices out there, through my experience, I believe there are two untapped rules our clients (and others!) need to remember the most, that they so often forget:
1. The Business Judgment Rule
The Business Judgment Rule for everyday minutes:
Be clear and transparent and show (or “prove”) the thinking about what was presented, debated, decided, or postponed for later consideration.
The readers of your minutes aren’t mind-readers. Minutes need to show the thinking behind the summaries or conclusions through things like highlights of the discussion, deliberations, consideration of alternatives. This means being clear and transparent about what was presented, debated, decided, or postponed for later consideration.
Take, for example, the unfortunate situation where a company has a workplace incident that resulted in a serious injury of an employee:
- Company ABC has a Health and Safety Committee with quarterly meetings that include documented presentations of safety statistics, safety audits, safety risks, and remediation being considered or implemented based on a priority schedule recommended by the Committee. The minutes record the topics of discussion and any additional steps that are being considered.
- Company XYZ has no Health and Safety committee and once a year their minutes note that “the COO provided a Safety Update.”
Which company is more at risk of punitive damages from the regulator or potential lawsuits? Despite the terrible situation, Company ABC can demonstrate that it was taking diligent efforts to ensure safety at their workplace. For Company XYZ, their directors may be at risk.
This example may make the Business Judgment Rule look straightforward. But, in practice, it takes a lot of professional judgment and a lot of professional gut-checking. It is not uncommon that I see a nebulous notation like “discussion ensued” after “Management has presented a budget, insurance review, financial update, or other.” This may be OK for certain routine or low-risk discussions. But the trick in meeting the Business Judgment Rule is that you show your thinking for areas that matter most.
This same principle applies to all your minutes–even those you keep for your team or yourself. Practices like writing down:
- The date of the meeting
- Who attended the meeting.
- The topics discussed
- Documents reviewed or discussed
- Follow-up and action items
While I’m not a big advocate of CYA (Cover Your A**) approaches to documentation or business in general, having clear records can take the stress, emotion, and confusion out of issues that arise, like questions about missed deadlines, budget overruns, and so on.
2. The Goldilocks Rule
The Goldilocks Rule of documentation:
Avoid documentation that is too minimal or too detailed. Aim for “just right.”
While I have seen minutes at both ends of the spectrum, minutes shouldn’t be minimalist, nor should they be a verbatim transcript. The key is to strive for the Goldilocks Rule of “just right.” (This is, of course, another concept easier said than done.)
Minutes should stand on their own. When your minutes are being drafted, consider them as being read by someone who did not attend the meeting. Would someone who didn’t attend be able to follow the issues and grasp the depth of discussion and deliberation that took place to reach key decisions?
The right level of detail, not too little – and not too much – will make your minutes immediately understandable to your audience.
While we are talking about detail, remember that minutes should be written objectively without adding judgment. (While, on occasion, a board or team member might want their disagreement recorded.)
Now, let me go on record, for that matter. While I agree that minutes should be objective, I disagree with the opinion of some from industry and the governance world that we must strip out nuance completely. This attitude and practice can erode any evidence of “governance” that we have at all. But this may be a debate for another day.
3 Best Practices for Minutes (and Avoiding the Pitfalls)
In addition to these two simple rules, I have three best practices to share that will help you avoid some of the most common pitfalls I’ve seen:
1. Use Templates for Formats (Not Copy-Paste)
While I agree that templates are useful for a consistent look to your minutes, hands-down the most common issue I see is what I would call “template-based” minutes. This is when the same materials are rehashed with similar wording, on a repeat loop. This is a particular issue for boards and committees. But no matter your reason for taking minutes or meeting notes, make sure your minutes reflect different thinking, lively discussion, and fresh perspective.
2. Follow-Up on Action Items (Don’t Let Them Fall into an Abyss)
Don’t let your discussions fall into an abyss. If one of your directors asks a question in the Q2 meeting and management says they will respond in Q3, make sure that it is noted—and it happens. And if the discussion didn’t happen for one reason or another, make sure to document that, too. Minutes are supposed to reflect your team, board, or project’s ongoing dialogue throughout the year and there should be a clear trail of this discussion.
3. Circulate Soon (Don’t Wait Too Long to Draft or Review)
When directors or management meet quarterly, this is often the first time they have seen the minutes from the last meeting. Since the last meeting, they may have been to Europe, Mexico, their nephew’s wedding, and built a garage, and had numerous other meetings. Is it reasonable they will remember what was said and deliberated three months ago? Not a chance. To get more feedback, leverage, and action from your minutes, circulate them faster than quarterly, even if the formal approval may be at that time.
While this is by no means a comprehensive look at minutes, I hope these practices motivate you to step back, refresh your approach, and take a minute to think about minutes.
If you have more detailed questions about your minutes or other practices, please contact me.