Minutes

Board meeting minutes are an important but often undervalued form of recordkeeping for organizations. Minutes provide a memorialized chronology of key information such as board actions, elections of officers or directors, and certain reports from committees and staff.  Additionally, meeting minutes can have important legal significance in an IRS examination and as evidence in courts if, for example, someone challenges the validity of certain actions or positions.

Unfortunately, a variety of mistakes are commonly associated with the taking and keeping of minutes including:

  • Failing to document a quorum was present;
  • Failing to document or provide a clear description about a board action taken;
  • Drafting a transcript of everything said at the meeting, including information that might be harmful to the organization if read by someone with access to the minutes (e.g., employees or members) or by a court reviewing a board action;
  • Drafting and distributing minutes to directors after a lengthy period of time has passed;
  • Waiting to approve minutes from past meetings until a substantial period of time has passed, decreasing the likelihood that mistakes will be caught and corrected; and
  • Failing to maintain a reasonable document management system, resulting in the loss of minutes from past meetings.

What should minutes look like?

Anyone reading an organization’s minutes should be able to easily understand, at a minimum, what actions were taken and how they were approved.

CONTENT

There is no hard and fast rule regarding the level of detail to be included in minutes. Organizations are not required to, nor should they, record every detail or statement said at the meeting. However, there should be enough information to make the minutes useful should they ever be used for reference or offered as evidence that an action was properly taken or that directors fulfilled their fiduciary duties. Boards and secretaries tasked with recording or approving the minutes should use their best judgment about the degree of specificity provided in the minutes. Board minutes should include basic information such as:

  • Date and time of meeting;
  • Whether the meeting is a special or regular meeting;
  • Whether notice was given or a waiver of notice signed by all directors;
  • Names of directors in attendance and directors not in attendance;
  • Names of other guests in attendance (and their titles or associations, if relevant);
  • Whether a quorum was established;
  • Any departures and re-entries of attendees; and
  • Any board actions (e.g., approvals, delegations of authority, directives).

Suggestions:

  • Include alternatives considered for important decisions to show diligence and reasonable care;
  • Attach and briefly summarize key points from any reports given to the board (so long as they may not be misconstrued to be prejudicial to the organization or to the board);
  • Know what vote is required by your bylaws (e.g., majority, supermajority) for certain actions and clearly indicate if such a vote was reached;
  • Record recusals from discussions and abstentions from voting;
  • Include those votes that were against a motion (see Part II); and
  • Include action items, what people commit to do.

Boards should also be thoughtful with how they handle confidential or sensitive information. For example, organizations may choose to hold an executive session to discuss matters such as executive director reviews or pending litigation. According to Blue Avocado, “The minutes of the meeting should indicate that the board met in executive session, and report on the topic of the discussion, although the specifics (such as the amount of a lawsuit settlement) may be confidential and appear only in a set of confidential-to-the-board minutes or other notes.”  A separate recordkeeping system should be established for such confidential information, which is better not identified as “minutes” to prevent members and others from asserting the right to view such information.

FORMAT

Format is really a question about how to best organize the content. Again, there is no right answer. There are however a few guiding principles. Ideally, nonprofits should maintain consistency with the format of their minutes. This does not mean the format should not be improved over the years to be more readable, clear, and useful to the organizations and others; this does however mean that format should not simply change at whim or due to lack of institutionalized knowledge about appropriate ways to document meeting minutes. Unexplainable changes in format can make minutes more difficult to understand internally and can also raise suspicion for outsiders. For example, if the organization’s January minutes provide detailed accounts of board discussion over a minor issue, it can raise flags if the organization’s February minutes barely account for any discussion on a major issue such as increasing an executive’s compensation amount by a substantial amount. Additionally, the format used should be one that is user- and reader-friendly.

Suggestions:

  • Adopt and use a meeting “minute template;”
  • Use a format that clearly indicates when a board action has been taken (e.g., “Resolved,” “Action”);
  • Set apart important information such as “action items” (actions that directors have committed to doing).

TIMING

The revised Form 990 asks in Part VI, Section A, Question 8 whether there is contemporaneous documentation of the board and board committee meeting minutes or written actions. The Form 990 instructions then go on to say that “contemporaneous” means “by the later of (1) the next meeting of the governing body or committee (such as approving the minutes of the prior meeting) or (2) 60 days after the date of the meeting or written action.” Organizations that do not conduct contemporaneous documentation must explain their practices or policies, if any, regarding documentation of board or board committee meetings or written actions.  Although there is no outlined penalty for a failure to take contemporaneous minutes, the question’s presence on Form 990 indicates that meeting minutes documentation is an area of concern for the IRS. Failure to adopt practices for better meeting minutes documentation may be a factor that weighs against the organization in the eyes of the IRS or courts. Additionally, a shallow explanation for poor practices may raise concern with funders, donors, and the public who have access to an organization’s Form 990.

RETENTION

While the duration of record retention can vary widely depending on the type of record, the IRS has indicated in its compliance guides that the board minutes of 501(c)(3) public charities, private foundations, and other tax-exempt organizations should be kept permanently by the organization. Other documents that the IRS directs to be kept permanently include an organization’s determination letter, articles of incorporation and bylaws, again highlighting the importance of meeting minutes. Organizations should be aware of such a strong directive from the IRS supported by the opinion of many nonprofit lawyers.

“Board Meeting Minutes – Part II” can be viewed here.

 

26 Responses to “Board Meeting Minutes – Part I”

  1. Gaylegifford

    Great post. Very comprehensive. It’s in my bookmarks and I’ll share with my many board clients.

    Reply
  2. Emily Chan

    Thank you! I’m glad you enjoyed it!

    Reply
  3. Davispolk Polk

    Wow, This is excellent article about meeting minutes.. This could be helpful for me.. Thanks..

    Reply
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    […] if there’s dissension brewing among board factions over an important issue or course of action taken? If a lawsuit erupts, what will be key evidence in the case? You guessed it: the Board […]

    Reply
  5. Joanne sussex

    If a question is asked and answered regarding the accounts, is it okay for the minutes to state ‘there were no questions regarding the accounts’. I think not but am being told that we cannot include every little thing in the minutes?

    Reply
    • Gene Takagi

      Joanne, minutes should never contain intentionally untruthful or misleading statements. But minutes are not required to be transcripts of all discussions. Whether minutes should document questions and answers regarding accounts will depend on specific facts and circumstances.

      Reply
  6. Maria Mowatt

    Are the minutes to a non profit organizations board meeting available for public review?

    Reply
    • Gene Takagi

      Maria, it depends. For most nonprofits that are not accepting government funding, the minutes do not have to be disclosed to the general public (though they may need to be disclosed to the members). Check with a lawyer in the applicable jurisdiction about any public disclosure requirements.

      Reply
  7. Mandy F.

    For nonprofit organizations in Virginia, is it a requirement that all Executive Committee meeting minutes be approved by the entire membership? I have searched for the answer, but cannot find it.

    It is my understanding that meeting minutes should be approved by the Executive Committee/Board before the start of the next consecutive meeting. I understand that all meeting minutes should be available to the entire membership.

    If we do not have to get approval for the meeting minutes by the entire membership who were not at the Executive Committee meeting, this will greatly help our organization move forward and come into the 21st century!

    Reply
  8. Andrew Pearen

    Has anyone dealt with a situation where minutes became unavailable?
    I just joined a board 6 months ago, and the minutes and person who took them 2 months before I joined are not available and every board meeting since I joined talk about the missing minutes and what to do. Any advise?

    Reply
    • Gene Takagi

      Moving forward, make sure one person is not in sole control of the only copy of minutes. Generally, a copy should be distributed to every director. In addition, a document retention and security policy may help prevent the harm that might result from lost minutes. With respect to the past, a board may need to determine what steps would be reasonable to obtain an existing copy of minutes (if they exist) or recreate them to reflect appropriate board actions.

      Reply
  9. Lowrey Hesse

    What are the time requirements for a meeting of the Board of Directors for a 501(c)3 organization. Is a yearly meeting required?

    Reply
    • Gene Takagi

      The board meeting requirements depend on state law. But meetings may be required when a board action is required (which might not be otherwise accomplished through an action by written consent). This requirement may arise, for example, if the board needs to elect officers or directors each year at an annual meeting. To meet the board members’ fiduciary duties, we generally recommend at least quarterly board meetings for an active nonprofit running programs.

      Reply
  10. Armen Yousoufian

    As a matter of law, or good practice, is it generally required that any member of a non-profit (a mutual water company with 100 members/connections, in a rural area) who wishes to attend monthly board meetings, be allowed to do so?

    And under what circumstances can a board close its meeting to any non board member? E.g. for an “executive session”, where nothing in the ByLaws or Articles of Incorporation mentions this?

    I am in Washington state, if it matters.

    Reply
    • Gene Takagi

      You should check with a lawyer in Washington about the state laws that govern Washington nonprofit corporations. Generally, unless a nonprofit is subject to some open meetings law because of state or local government funding, board meetings can be restricted to just board members. This makes sense because board members are fiduciaries ultimately responsible for the corporations and may need to make sensitive decisions on personnel, finances, contractual relationships, and strategy that could be compromised or defeated if publicly known. The presence of non-fiduciaries would also chill open board discussions and could breach confidentiality.

      Reply
  11. Jennifer

    Can the public electronically record the general meeting of a nonprofit?

    Reply
    • Gene Takagi

      This may depend on the particular law that requires the nonprofit to hold a public meeting (state and local laws differ) or on the policies of the nonprofit if there are no legal requirements.

      Reply
  12. Jennifer

    What if board members votes on something that goes against the nonprofit bylaws?

    Reply
    • Gene Takagi

      A nonprofit’s board must comply with the requirements in its bylaws, but a member of the general public may have no legal standing to enforce the board to act compliantly. If it’s a serious enough violation involving a diversion of charitable assets, the state’s charity regulator (typically, the Attorney General) may choose to examine the matter.

      Reply
  13. Sandy Millerbernd

    Our non profit voted on several policies and were recorded in minutes incorrectly. Is this considered a “non” meeting? We redid the policies at next meeting.

    Reply
    • Gene Takagi

      The validity of a meeting and the validity of actions taken at a meeting are different things. If actions were recorded in minutes in a way that did not reflect the action taken, the minutes should not be approved by the board until they are first corrected. If an action was not properly taken (e.g., there was an insufficient vote) but the executive relied on the validity of the action, the board may attempt to correct it by taking the action at the next meeting and noting that it such approval should be effective retroactively (noting briefly that it had mistakenly believed it to have been taken previously).

      Reply
  14. Seema Arora

    I am a board member of a non profit organization and was president last year.I was recently asked by another organization to share some of our minutes during my term as the president because it had some content related to a member under investigation by their organization. Is it ok to share them?

    Reply
    • Gene Takagi

      If a person is a board member of one organization, the minutes she or he has for the organization should remain private unless subject to some disclosure requirement, and the board member has a duty of loyalty that includes keeping confidential information confidential. If such individual is also a board member of another organization, she or he also has a duty of loyalty to that organization, which may mean that she or he should share information that is critical to that organization, but only to the extent that such information is not confidential. In some cases, this may be a dilemma for the individual, who might choose to resign from the second board. In most cases, however, the information may not be so critical to the second organization, and the director may simply decline to be able to share the confidential information with the board of that organization.

      Reply
  15. peg himes

    I understand notes and any audio recording should be destroyed once the executive session meeting minutes have been approved, but the actual written/approved minutes should be kept, correct? Second question, kept confidentially by the executive Secretary possibly? And third,For how long?

    Reply
    • Gene Takagi

      Written approved minutes of board meetings should be kept, probably permanently. Whether notes and recordings should be destroyed immediately upon approval of the minutes is a more nuanced decision, depending in part on the type of content on them and whether there is a business reason for maintaining them. Minutes should be available to all directors, and it’s more customary than not, in my experience, to allow each director to maintain her or his own record of meeting minutes. Note that members of nonprofit corporations may have a legal right to view all minutes of the meetings of the board and the members. Accordingly, what to record in the minutes becomes a very important decision that may need great consideration.

      Reply

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