Board resolutions are a formal way to record and document the decisions taken at meetings of the board. They guarantee that the decisions taken are in line with the state, federal and local laws and regulations. They also reduce any legal risks that could result from these choices.
The board must keep a log of every decision, regardless of how minor or significant they might be. The board must also be able to explain the reasoning behind the decision, so that anyone who isn’t boardbookit admin a member of the board can understand the reasoning behind the decision and determine if it was a correct decision.
Writing a board resolution can be an intimidating task. If you know the purpose behind these documents and utilizing the right tools to create them and make it much easier.
A Board Resolution: What is it Is and How to Write One
When the board takes important decisions that impact shareholders or the company, they need to document these decisions in the formal manner. These decisions are called resolutions of the board, and they help establish clear policies in areas such as governance and ethics. Resolutions are also used to show the board’s commitment to corporate transparency.
Resolutions of the board are adopted either in a formal meeting of the board or, more recently, via written resolutions. When the resolution is written it should begin with an « WHEREAS » which outlines the issues that were discussed during the board meeting. Then, the resolutions are added. The document must be signed by every director who attended the meeting.