Room to improve?How to get your meeting agendas and minutes rightBetter Boards Conference 5 July 2013 MELBOURNE SYDNEY BRISBANE
Agenda Getting agendas and minutes right: • Why is it so important? • James Hardie Case • Putting it into practice
1. Why is it so important? • Recent cases about the actions of directors send a clear message: • increasing trend of holding company directors accountable for the actions of a company • contents of agendas and minutes have considerable weight • Same principles apply to boards of not-for-profit companies and to committees of associations
1. Why is it so important? (cont) • Consequences of poor agendas and minutes: 1. reputational damage 2. fines and penalties 3. potential loss of endorsements from the ATO or the ACNC. Get your agendas and minutes right!!!
2. James Hardie Case • May 2012 James Hardie case highlights the importance of getting meeting agendas and minutes right • Board meeting, February 2001- directors approved announcement to the ASX about a corporate restructure, announcement released, part of restructure did not eventuate • ASIC considered statement in the announcement was misleadingand issued proceedings against the directors for breaching their duty of care and diligence under the Corporations Act
2. James Hardie Case (cont) • Court proceedings - High Court held in May 2012 that the former James Hardie directors had breached the Corporations Act. • Decision essentially turned on: • factual finding that the directors had approved the announcement; and • signed minutes of the board meeting had a significant part to play in the Court’s decision.
2. James Hardie Case (cont) Getting the AGENDA right: • Court said the directors had a non-delegable duty to approve the announcement as part of its responsibility to be involved in monitoring the company. • Courts yet to fully consider the boundaries of non-delegable duties in relation to the obligation to approve certain announcementsBUT the Court indicated boards may be required to approve announcements/press releases that relate to matters that are of considerable importance to the company’s future and/or matters of importance to stakeholders.
2. James Hardie Case (cont) Getting the MINUTES right: • Minutes were signed by the chairman at the next board meeting in April 2001 - breaching section 251A(1) of the Corporations Act because this was more than 1 month after the meeting • The minutes therefore lost their special evidentiary status, highlighting the importance and probative value of minutes
2. James Hardie Case (cont) Getting the MINUTES right (cont): • Court cautioned directors to make sure they read minutes properly before approving them. • Accurate recording of events at a meeting is important.
3. Putting it into practice Getting the AGENDA right: • Purpose of the agenda is to set out the subject matters that are for discussion at your board/committee meeting • Following on from James Hardie, it is clear that directors/committee members should: • read all board/committee papers – make sure you understand the underlying facts • speak up if you do not understand something • beware of non-delegable duties and how to mange them
3. Putting it into practice (cont) Agenda checklist: • Put the organisation name at the top of the document and the fact that it is a board / committee meeting • List the agenda items in a table format – include item numbers, page numbers, person responsible, action required • Include: • welcome and attendance • declaration of interests • minutes of the last board/committee meeting
3. Putting it into practice (cont) Agenda checklist (cont): 3. Include(cont) • matters arising from previous meeting • action items • circulating resolutions • CEO report • general business - matters that need critical and detailed attention • date of next meeting • time the meeting concludes
3. Putting it into practice (cont) Getting the MINUTES right: • Official record of proceedings and resolutions – primary evidentiary source of what occurred at meeting • Getting it right is two-fold: • Protect the interests of the organisation • Protect the interests of individual directors/committee members
3. Putting it into practice (cont) Minutes checklist: • Use the past tense and active voice • If minutes are prepared before a meeting, prepare them at the same as papers and include substance and amendments after the meeting • Scrutinise for accuracy, address concerns before approving • Enter minutes into minute book within 1 month after meeting
3. Putting it into practice (cont) Minutes checklist (cont): 5. Record details of discussions about: • Attendance • Welcome • Declarations of interest • Minutes of previous meeting • Action items • CEO, financial, committee reports • General business • Next meeting • Closure
Vera VisevicPartner Phone: + 61 2 8298 5812 Email: email@example.com www.millsoakley.com.au