4 responses to “Meaningful Minutes”

  1. Judy, I agree that the recording of key points considered can be very helpful to corporate memory and significantly reduce board meeting time in rehashing issues. Just as you suggest that recorded votes decrease board unity, in my opinion recording who raised various points during the board meeting discussions is not appropriate. Including the pros and cons on the issue that were brought up during discussion refreshes everyone’s minds in the future, while stating who said what increases the organization’s risk as someone opposed to the direction the board took can use the recorded information to instigate division among the board members and to initiate negative public media. Including key points that influenced the discussion is a very different thing than preparing a transcript. The factors that were considered when making the decision can be briefly stated to trigger director memory without providing detail on diverse views that can be seen as conflict within the board.

  2. Julie,

    In your blog you mention that returning papers to the secretary or requiring directors to destroy their papers after a certain period of time is a risk mitigation strategy. You don’t fully describe what is the risk that is being mitigated – you mention that great embarrassment may be generated if full discussion comes into the public domain. But is embarrassment a risk that neccesitates such a active generation of lack of transparency and miscommunication? I thought we wanted directors who were able to discuss matters without fear or favour? Aren’t directors supposed to be big boys and girls? Haven’t directors left embarrassment back in high school when they worried about a date for the school formal?

    Julie, do you have an example of a rationale for such an extreme measure that is in the public record?

    Reducing board minutes to something completely anodyne seems to be inimical to good governance. An essential part of governance is to be able to properly assess performance, especially your own. Psychologists know enough about memory to be sure when you rely on memory to evaluate your own performance you end up with a very optimistically biased view on your own abilities. A contemporaneous recording of reasons for decisions provides the basis for a more realistic assessment of performance – for example, this recording is something that is strongly recommended for assessment of qualitative judgments in investment management.

    Further, which part of a full and frank and honest discussion would directors not be willing to defend?

  3. Hi Frank,
    The most well known occasion in Australia of a board being embarrassed was part of the AWB scandal – one director had written in the margin of his board pack that a transaction propposed ‘did not pass the smell test’. The prosecution tried to use the note to infer that the board were aware of the bribery of the Sadam Husseim regime to enable greater volumes of wheat exports.
    I agree with Cathie that the permanent record should be kept without any such emotive anotations; they are useful to jog a director’s memory so that he or she will not forget to raise a concern they felt when reading the papers but not for recording for use by third parties.
    The practice of requiring directors to return their board papers to the company for secure disposal is quite common; I have a board that does this and others that require directors to maintain their documentation in a secure location and dispose of it safely. Board portals manage this risk better than paper based systems.
    In all my experience I haven’t had a board that was required to disclose its papers (although some of my government sector boards did have Freedom of Information Requests for certain items of information. That was the point of my post – too many boards are reducing their minutes to a record that is useless when revisiting discussions to avoid a risk of disclosure that is better managed by the sort of good governance that drives good corporate performance and that they are very unlikely to face.

  4. Julie,

    It wasn’t an example of an embarrassing note that I was after, but a public rationale for the extreme policy you are discussing.

    If I may paraphrase your “too many boards are reducing their minutes to a record that is useless when revisiting discussions to avoid a risk of disclosure that is better managed by the sort of good governance that drives good corporate performance and that they are very unlikely to face.”

    An extreme policy of only recording decisions of a board meeting is treating the symptom, not the problem. What are Boards doing if they don’t want a reasonable summary of the main points of discussion behind a decision?

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