Do We Have to Put All That in the Minutes?

Hugh M. Kelly, Toronto

“Must the minutes include all motions, even the motions that are defeated?”

“Do we have to put in the minutes everything that everybody says? Or can we just summarize the various views?”

“Is it permissible for us to leave out the names of the movers and seconders of motions?”

“Our practice is to keep our minutes nice and slim, leaving out everything that we consider unnecessary, concentrating on just the action items. Are we at any risk in doing it this way?”

These are just some of the frequently asked questions put to us about the content of minutes of meetings of Boards of Directors, of Committees, and of Members.  In the January 2011 issue of this Newsletter, we offered some general comments on considerations that should be taken into account when preparing minutes of meetings.  This article offers greater detail on the content that is required to be included, and what is discretionary.

As will be well known, practices in the detail included in minutes vary widely, from the “bare bones” recitation, to a verbatim transcript of proceedings, with most falling somewhere in between these extremes. Subject to the absolute minimum noted in a moment, the choice of detail is in the discretion of the organization, having regard to what will be useful for the future operations of the organization and the future guidance of the Directors, and officers and staff (particularly the senior staff).

Generally speaking, statutes in Canada respecting corporations, business corporations and not-for-profit corporations alike, require that minutes of meetings of shareholders/members and of directors must be maintained, but do not prescribe the content of minutes (although British Columbia requires a list of every director present at a meeting if that information is not contained in the minutes).

The Canada Corporations Act provides, in part:

112. (1) Every [corporation] shall cause minutes of all proceedings at meetings of the [members] and of the directors and of any executive committee to be entered in books kept for that purpose.

(2) Any such minutes if purporting to be signed by the chairman of the meeting at which the proceedings were had, or by the chairman of the next succeeding meeting are evidence of the proceedings.

(3) Where minutes, in accordance with this section, have been made of the proceedings of any meeting of the [members] or of the directors or executive committee, then, until the contrary is proved, the meeting shall be deemed to have been duly called and held and all proceedings had thereat to have been duly had and all appointments of directors, managers or other officers shall be deemed to have been duly made.

There are parallel provisions in some but not all provinces.

At an absolute “bare bones” minimum, minutes of Directors, Committees and Members should include the following components (as applicable):

1. the identity of the organization (and Committee, as applicable);
2. the place and date of meeting, and whether morning, afternoon or evening (or time of day);
3. the names of those present, identifying separately:
   (a) those who are Directors (or Committee members, or Members, as the case requires), and guests invited to be present, and
   (b) those who are present in person, and those present electronically;
4. the identity of the person chairing the meeting and preferably the secretary;
5. the text of any motions that are corporate actions taken which may have policy or financial implications;
6. the name of each person declaring a conflict of interest, the identification of the specific matter on which the declaration was made, and the general nature of the interest as actually declared;
7. where a matter must be carried by more than a simple majority, the number of votes for and against, and the declaration of the chair as to whether the motion was passed by the requisite majority;
8. where a vote is taken by ballot, the number of ballots in favour, the number against, and the number of ballots spoiled, along with the declaration of the chair as to whether the motion was passed by the requisite majority;
9. whenever requested by any Director at a meeting:
   (a) the identity of such Director,
   (b) the way in which he/she cast his/her vote, and
   (c) a brief statement of his/her objection to the matter or to considering the matter;
10. the signatures of chair and secretary of the meeting.

Note, as to (c) above, that certain due diligence defences require a Director to record his or her objection. As a result, there is an obligation upon the organization to accede to a request (which itself is reasonable) that such a statement be recorded in the minutes.

There is no requirement that the minutes include:

(a) everything that every person says, nor even a summary of the arguments for and against the substance of any motion;

(b) the identity of the mover and seconder of motions; inclusion or exclusion of such names is purely a matter of policy, and exclusion is as appropriate as inclusion;

(c) defeated motions, although, there can be merit in having such details in the minutes for purposes of keeping an historical record of what the organization has considered and rejected;

(d) the identification of items that have been included in the agenda for information only; nor is it necessary or appropriate to include or attach copies of such information items. Where, however, it is considered that such material forms a necessary background to the related item upon which action was taken, at least some reference may be appropriate.

Of course, the By-laws of the organization could contain provisions prescribing the content of minutes in as much or as little detail as may be considered necessary or desirable for that organization. In determining what By-law provisions should be adopted, perhaps the question that should be asked is:

Would greater details, beyond the “bare bones” minimum, show justification for the decisions made, or be useful guidance for the organization or its Board of Directors, Committees, Chief Executive Officer and/or his/her staff in making appropriate decisions in the future?

In the absence of a By-law provision prescribing the content of the minutes, the chair and secretary should ask themselves that same question with respect to the content of the minutes of any particular meeting.

As with many matters that must be determined, a common sense consideration of this question will generally offer prudent guidance as to the particular content of any specific minutes.

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