As the board turns
Making sure your minutes matter
Minutes of board meetings are more than a parliamentary
formality -they're a legal record of your nonprofit's activity. As
such, it's important that board members make sure the minutes adequately
detail matters of importance.
Why do minutes matter?
If your not-for-profit
is audited by the IRS or another authority, such as a state attorney
general, board meeting minutes are likely to be one of the first
things reviewed. Therefore, always prepare them in a manner that
would withstand official scrutiny.
For example, if the IRS reviews
your organization's executive compensation policies, it will review
board minutes to understand the process the board used to set compensation.
If there's no reference to any discussion of compensation issues,
the IRS would have to assume that decisions were made arbitrarily.
The minutes represent the actions of the board, and
it's often said that if something isn't mentioned in the minutes, it
never happened.
What should you include?
The secretary of the board
usually is responsible for recording minutes during meetings and preparing
them for the board's review. The board then approves or amends the
minutes. A final copy should be distributed to every member and retained
in the board member manual and your organization's official records.
At a minimum, your board minutes should include:
- Meeting
date, and start and end times,
- A roll call of board members,
- Voting
results, and the names of abstainers and dissenters,
- A general narrative
of proceedings, including mentions of presentations, reports
or documents introduced, and a summary of major discussions or debates,
- Future
action steps, and
- Signatures of the secretary and board chair.
Also,
make notations such as whether a quorum exists, guests who are present,
and government grants, gifts and contributions received.
How much is
too much?
Considering the pressure not-for-profits face to be as
transparent as possible in their operations, your organization may
want to highlight certain types of information that are of interest
to regulatory groups and stakeholders. These areas include:
- Acknowledgment
of significant gifts or contributions,
- Approval of funding contracts,
- Authorization of banking institutions,
- Board approval
or acceptance for investment, conflict-of-interest and other
policies,
- Approval for purchases
of equipment or other major items,
- Board designations for the use
of certain funds,
- Recognition of restrictions on monies received,
- Salary
adjustment approvals, and
- Review and approval of the executive director's
salary.
Deciding how much detail to include in your minutes can
be more subjective. You'll want to be informative without delving into
minutiae or including a nearly verbatim "he said, she said" recap of
events. A helpful guideline is to provide enough detail so that absent
board members can identify issues or discussions that may require further
review.
The minutes should also be detailed enough to explain
how or why the board reached a particular decision. Board members can
help fine-tune the minutes by carefully reviewing them to ensure key
points are included and the information provided is adequate without
being excessive.
Why you should be thorough
Your meeting
minutes can reflect your organization positively or negatively.
So take the time to ensure they're kept in a way that supports your
exempt status and reinforces the board's governance role.
These publications are distributed with the understanding
that the author, publisher and distributor are not rendering legal,
accounting or other professional advice or opinions on specific facts
or matters, and, accordingly, assume no liability whatsoever in connection
to its use.
