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17 March 2011 Could your board minutes provide the evidence needed to protect you as a director?

By Alistair Jaque, Partner and Phillip Briffa, Solicitor


In brief – Board minutes can serve as crucial evidence

Having accurate minutes is not just a formality required under the corporations law. Detailed minutes may serve as the crucial evidence required to defend a director from charges of breaching of his or her duties, including charges of trading while insolvent.


Definition and purpose of board minutes

A signed and recorded minute is evidence of a proceeding, resolution or declaration to which the minute relates. Accurate board minutes are an important resource for managing the company and support sound risk management by providing a written record of board deliberations and decisions.  

Board minutes provide evidence that a board has exercised care in decision making. They also substantiate that a board is operating in accordance with legal requirements, including the company's constitution and the regulatory requirements.

Board minutes assist in the management of the company

Beyond being a legal protection, board minutes also serve an important management function. Accurate minutes are required in order to:

  • Confirm any decisions made
  • Record any agreed actions to be taken
  • Record who has been allocated any tasks or responsibilities
  • Prompt action from any relevant attendees
  • Provide details of the meeting to anyone unable to attend
  • Serve as a record of the meeting's procedure and outcome
Compliance not universal

Despite the importance of board minutes, many companies continue to make inadequate records of board meetings. This is regrettable because by neglecting this simple task, directors are depriving themselves of an important legal safeguard.  

In the event of legal action being taken against the company, minutes of meetings can be used to prove that the directors have taken all reasonable steps to act responsibly, comply with legal requirements and mitigate risk.  

For further information, please contact:

Alistair Jaque, Partner  |  Phone: +61 2 9233 5544  |  Email: afj@swaab.com.au

If you would like to republish this article, it is generally approved, but prior to doing so please contact the Marketing team at marketing@swaab.com.au

This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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