Minutes and Software, Oversight, Regulation & Disclosure Flashcards
Are Companies required to take Minutes?
Leglisation: Companies are required by law to keep minutes of meetings of their directors (CA2006 s. 248) or general meetings of their members (CA2006 s. 355(1)(b)), written resolutions of the members (CA2006 s. 355(1)(a)) or decisions of any sole member (CA2006 s. 355) or sole member of a class (CA2006 s. 359).
Minutes should be unambiguous and in the third person, singular and past tense.
Static Data- what is good practice to include in the minutes? What is not necessary for Members meetings?
The content of the minutes is not set out in the Act or Articles, however, good practice to include the following:
- company name and registered number (registered number is useful where the company subsequently changes its name);
- place, date and time the meeting commenced;
- attendees (indicating which part of the meeting was attended by those not present for the whole meeting); (Not required for Members Meeting)
- identity of the person chairing the meeting;
- confirmation that a quorum is present;
- declaration of any specific potential conflicts of interest (Not required for Members Meeting)
- in matters to be discussed or changes of general potential conflicts of interest;
- and time meeting closes
What is Variable Data?
- matters brought forward and action points from previous meeting(s);
- review and approval for signature of minutes of the previous meeting;
- synopsis of discussions on matters on agenda, actions points, decisions made;
- matters to be carried forward and action points; and
- any other business not on the agenda.
What are the Six C’s in Minutes?
- Clarity
- Coherence
- Correctness
- Conciseness
- Completeness
- Consistency
‘If i had clarity I would be coherent in explaining concisely and completely the consistent correctness of my minutes’
What is the General Format for Board Minutes?
As a minimum, should include:
- name of company
- place where meeting held
- day and date of meeting
- list of those present and other attendees
- apologies for absence
- approval of previous minutes
- accurate and unambiguous record of proceedings, capturing key points and decisions reached
- consider using numbering system
- chairman’s signature
What is the General Format for Minutes of General Meetings?
- Statutory requirement to prepare
- Signed by chairman
- Failure to keep minute books makes directors & officers liable to a daily default fine
- Permanent record of business conducted and decisions reached
- Must be clear, concise and unambiguous
- No alterations made once agreed and signed (unless an amending minute at subsequent meeting)
- Approved at next available board meeting - no need for shareholder approval at next AGM
- Members entitled to inspect, and to be supplied with copy within 14 days of request
Are minutes evidence of the proceedings of the meeting? What are written resolutions, do they require minutes?
Evidence: Minutes of meetings of the directors recorded and retained in accordance with CA2006 s. 248 and authenticated by the chair of the next directors’ meeting are evidence (in Scotland sufficient evidence) of the proceedings of the meeting (CA2006 s. 249(1)). Provided the minutes have been properly recorded then until the contrary is proved the meeting is deemed duly held and convened, the proceedings to have taken place and any appointments made at the meeting are deemed valid (CA2006 s. 249(2)).
This evidentiary status does not apply to written resolutions of the directors in the Act. However, Model Articles Ltd and Guar reg. 15 do require copies of unanimous or majority decisions of the directors to be retained and this clearly also includes written resolutions.
Written Resolutions: Where decisions are taken by written resolution no need for minutes but instead copies of the resolutions signed by the directors to signify their consent. Resolutions only contain details of the decisions to be approved and may also contain a briefing of the relevant subject matter. Written resolutions do not however contain any discussion of the subject matter as there is no forum for any such discussion.
If the minutes are retained in electronic form, they must still be authenticated by the chair of the meeting to be treated as evidence in proceedings.
Are minutes Proof of Existance of a Company and Record of decision?
- Proof of existence of company and that directors have authority to undertake certain specific actions.
- Extracts of minutes often requested, and may be certified by company secretary.
- Historic record of significant events and decision over life of company.
- Director and company secretary changes mean that minutes provide the only long-term account of what took place at meetings.
- Record decisions both in favour or against each matter brought to the board and include sufficient detail of the discussion to allow someone, not present at the meeting, to gain an insight into the reasons leading up to that decision and the key factors taken into consideration.
- Minutes should reflect not only the actions of the board but the context.
- In the interest of brevity, background information need not be repeated.
- If Action points are recorded, it is useful to keep a record of these separately.
- Demonstration of due diligence on part of decision-maker, taking into consideration all the factors- s172 statement.
- Minutes that are properly authenticated and kept are evidence that the meeting took place and that the business set out in the minutes was undertaken.
Minutes as Legal Evidence in support of Actions
Should minutes be retained?
- In practice, minutes of meetings permanently.
- However, companies must keep minutes of meetings of both members and directors for at least 10 years, for meetings held after 1 October 2007 (implementation of the Act) (CA2006 ss. 248(2) and 355).
- For any meetings held before 1 October 2007 under the CA1985, minutes of meetings of the members and of the directors have to be kept permanently.
- Recommended that notes taken by the minute taker are securely destroyed once the final version of the minutes has been agreed. RISK: notes discoverable in any legal proceedings.
- Directors’ notes, whether in hard or soft copy or annotated with board portal applications, and draft versions of the minutes, particularly in the regulated sectors. Boards should adopt a policy.
- Where minutes are created and retained in electronic form, they must still be capable of being reproduced in hard copy form (CA2006 s. 1135(2)). This requirement will apply not only at the point when the minutes are first stored in electronic form but for at least the 10-year period following the date of the meeting. NOTE advances in technology advances essential that historic minutes are capable of being reproduced in hard copy.
Security of Minutes
- Minutes must be stored securely with access limited to those that require access, because they contain sensitive information and for a listed company very possibly price sensitive information.
- Security is required not only to keep the content of minutes secure but also to guard against falsification of the minutes and to facilitate its discovery in any legal proceedings.
Sequential numbering of all paragraphs.
- The chair to both sign the last page but also sign or at least initial each page.
- Hard copy minute books to be kept in lockable cupboard with restricted access.
- Where loose-leaf binders are used these should be lockable.
- To mitigate against the insertion of new text, minutes should be printed single spaced, no spaces between paragraphs and the signature of the chair on the line immediately following the last paragraph. Using special security printed and possibly numbered paper for the copy of the minutes to be signed. This does of course present an additional security risk, as the paper must also be kept securely.
Significant fines by ICO for breaches in GDPR
What are the Factors to consider in choosing a vendor for Company Secreterial Software?
Flexibility, Vendor which will adapt to your chosen business model
helpfulness, Vendor who wants to build a long term partnership
knowledge, Aware of legal requirements, and usage of technology
foresight, suppliers main area of development and future upgrades
support, Availability of tech support
accountability, iron out issues without demanding extra
security- fully committed to providing assurance of security controls
What are the main areas of software?
- form filing and online filing packages;
- statutory register maintenance;
- minutes and resolution generation applications; and
- group structure overview.
The range of ‘group’ information required to be kept track of and includes tax reference numbers, GDPR registration and renewals, trade mark and patent registrations, licences etc., manual systems are quickly overwhelmed
Evaluation of needs for Company, what are the different ways of identifying needs?
Different ways of identifying business and user requirements, which should be methodidcal and structured:
Focus Groups - group of users that perform specific duties and tasks that can be polled to ascertain their duties, functions and system interactions within the company,
Interviews - what is currently being done to support the system?
Interface Analysis- an examination as to inputs, outputs and intermediary steps that may be required for the system to function and define interoperability to exisitng system.
Surveys- an internal account from different points of view as to how operations and processes actually happen.
Observation
Business/user/system requirements + needs/wants/priorities= tasks/processes/workflow
What should you consider during the Implementation of Appropriate Software?
- training- introductory training on the new system
- validation of data- Validation process so that the data captured, both old and new is accurate.
- Must provide accurate, secure and accessible data
Input is dependant on the Accuracy and completeness of the underlying dataset- deteriorates over time.
What are the Pro’s and Cons for an Internal vs an External Board Evaluation?
What are the Investigative Powers of Regulators Summarised-
