Board resolutions are a formal method of recording and documenting the decisions made during a meeting. They aid in ensuring that the choices made are in line with the federal, state and local laws and regulations. They also minimize the legal risks that could result from these decisions.
The board must keep track of every decision, no matter how small or significant they might be. The go to my blog board must also be able to explain the reasoning of the decision so that anyone outside of the organization can understand why the decision was made and determine if it was a correct choice.
Therefore, writing boards resolutions can be an intimidating task. If you know the purpose behind these documents and utilizing the correct tools to create them to make it much easier.
What is a Board Resolution and how do you create one?
The board must document important decisions affecting shareholders or the company in a formal manner. These decisions are referred as resolutions of the board. They help to establish clear guidelines regarding issues like governance, ethics, and risk management. These resolutions are also used to show the board’s commitment to corporate transparency.
Board resolutions can be passed in a physical board meeting or, in more recent times, they may be passed through written resolutions. When writing a resolution it must begin with a “WHEREAS” which is a statement of the subjects that were discussed at the board meeting. Then, the resolutions are added. The document must be signed by every director who attended the meeting.