Room to improve? How to get your meeting agendas and minutes right Better Boards Conference 5 July...
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Transcript of Room to improve? How to get your meeting agendas and minutes right Better Boards Conference 5 July...
Room to improve?
How to get your meeting agendas and minutes right
Better Boards Conference 5 July 2013
MELBOURNE SYDNEY BRISBANE1
Agenda
Getting agendas and minutes right:
1.Why is it so important?
2.James Hardie Case
3.Putting it into practice
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1. Why is it so important?
•Recent cases about the actions of directors send a clear message:
1. increasing trend of holding company directors accountable for the actions of a company
2. contents of agendas and minutes have considerable weight
•Same principles apply to boards of not-for-profit companies and to committees of associations
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• 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!!!
1. Why is it so important? (cont)
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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 misleading and issued proceedings against the directors for breaching their duty of care and diligence under the Corporations Act
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• 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)
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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 announcements BUT
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.
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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
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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.
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3. Putting it into practiceGetting 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:
1. read all board/committee papers – make sure you understand the underlying facts
2. speak up if you do not understand something
3. beware of non-delegable duties and how to mange them
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3. Putting it into practice (cont)Agenda checklist:
1. Put the organisation name at the top of the document and the fact that it is a board / committee meeting
2. List the agenda items in a table format – include item numbers, page numbers, person responsible, action required
3. Include:
4. welcome and attendance
5. declaration of interests
6. minutes of the last board/committee meeting15
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
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3. Putting it into practice (cont)
Getting the MINUTES right:
1. Official record of proceedings and resolutions – primary evidentiary source of what occurred at meeting
2. Getting it right is two-fold:
• Protect the interests of the organisation
• Protect the interests of individual directors/committee members
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3. Putting it into practice (cont)
Minutes checklist:
1. Use the past tense and active voice
2. If minutes are prepared before a meeting, prepare them at the same as papers and include substance and amendments after the meeting
3. Scrutinise for accuracy, address concerns before approving
4. Enter minutes into minute book within 1 month after meeting
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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
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MelbourneLevel 6, 530 Collins Street, Melbourne VIC 3000P.O. Box 453, Collins Street West, Melbourne VIC 8007DX 558 Melbourne VIC
+61 3 9670 9111 Phone+61 3 9605 0933 Fax
SydneyLevel 12, 400 George Street, Sydney NSW 2000P.O. Box H316, Australia Square NSW 1215DX 13025 Syd-Market St NSW
+61 2 8289 5800 Phone+61 2 9247 1315 Fax
BrisbaneLevel 14, 145 Ann Street, Brisbane 4000P.O. Box 12608, George Street, Brisbane QLD 4003DX 40160 Brisbane Uptown QLD
+61 7 3228 0400 Phone+61 7 3012 8777 Fax
www.millsoakley.com.au
Vera VisevicPartner
Phone: + 61 2 8298 5812Email: [email protected]
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