Board secretaries play a critical role in board meetings and everything that goes into them. Critical decisions can be made by ensuring the meetings are organized efficiently and run smoothly. Given the complexity of the process, there are legal requirements to be followed when organizing board meetings.
This article will discuss the goals of board meetings and the role secretaries play in organizing them. Besides, all the legal requirements and strategies when conducting board meetings will be covered.
What is the role of the board (meetings)?
The board of directors makes crucial decisions that affect the company's strategy, finances, and management. To ensure the success of the business, they offer direction and the needed supervision. How often these meetings are held depends on several factors. One such factor is the demands of the company. However, typically board meetings happen every 3 months. The main roles of the board are:
- Ensuring corporate compliance: Board meetings help ensure the business complies with all the regulatory requirements and regulations.
- Making strategic decisions: Every board typically involves making critical strategic decisions for the company. Such meetings allow for gathering board members and holding vital discussions. It allows for making more informed voting decisions for the company.
- Providing direction: The board aims to guide the management and operations of the organization, ensuring that they align with its goals and objectives.
- Monitoring financial performance: Board meetings provide an opportunity to assess the financial performance of the business. Such financial reviews allow for problems to be found well before escalating. Then the board can make suggestions for improvement so the management can solve these issues early on.
Startup board vs an established company board
The main difference between board meetings in startups and established companies is the degree of informality and flexibility. Board meetings in larger companies tend to be more organized, regulated, and cautious. In turn, startup board meetings are typically more relaxed, adaptable, and flexible.
Startup boards can make decisions quickly, thanks to this informality. They can adjust and adapt to changing conditions, which is crucial in a fast-paced and rapidly-evolving setting. Startups can benefit from their agility and keep ahead of the competition. But larger organizations may need to be more cautious and adhere to more rigid processes.
What is the role of a board secretary in a startup?
The board of directors plays a crucial role in guiding the company's growth and success. However, behind the scenes, the board secretary plays an equally important role in ensuring that the board runs smoothly and effectively. The main responsibilities of the board secretary are:
- Board meetings’ legal compliance: The board secretary is responsible for maintaining accurate records of board meetings and ensuring that all board decisions are properly documented. They are also responsible for coordinating board meetings and ensuring that all necessary materials and information are provided to board members in advance.
- Board operations: One of the secretary's primary responsibilities is ensuring that the board functions in an open and accountable manner. It involves organization, preparation and every other aspect of the board's operations.
With a capable and knowledgeable board secretary, the company and its board can ensure efficient and compliant functions of the board. And as a result, the board can successfully guide the company towards its growth.
Legal Requirements for Startup Board Meetings
Board meetings have legal requirements that need to be followed to stay compliant. At the same time, there are rules and guidelines for successful and efficient board meetings. These will be presented in three stages: the requirements that need to be followed before the meeting, during one and after the meeting is held.
Before the Meeting
- Meeting organization: As with any meeting, there is a need to choose the date, time and its location. With many companies doing online board meetings, it will require choosing the online meeting provider and then creating an online event (with a meeting link).
- Setting the Agenda: The agenda is a critical element of the meeting. It allows for the attendees to know what will be discussed and what kind of decisions will have to be made. In addition to that, the agenda will allow keeping the board meeting efficient and structured.
- Notice requirements: Under state law and the company's bylaws, board members must receive notice of the meeting in advance (typically 14 days in advance). The notice will have to mention the date and time of the meeting, the location (e.g., a link to access the online meeting), and the strategic decisions that will require voting.
- Voting delegation: One of the important elements of the board meetings is voting on strategic decisions. When some members cannot attend the meeting, there should be an ability for them to delegate their vote to another member.
- Review the Financial Statements: As the board secretary, there is a need to review the financial statements in advance to make sure they are accurate. It will allow the board to make informative decisions based on the correct, up-to-date data.
- Documentation sharing: Sharing any relevant documents pre-meeting may be necessary to provide members with the context and information needed to come to the meeting prepared. Using a virtual data room can be a great way of doing so securely and confidently.
During the Meeting
- Conducting the meeting: During the meeting it’s important to stick to the agenda. Clarity around the structure of the meeting will ensure that the most important matters are discussed and addressed effectively.
- Attendance: Recording the meeting attendance will be necessary. In case of the delegated representation, those who don’t attend the meeting are represented by the members they gave their voting power to.
- Quorum: For the board to function and conduct any type of business, there is a minimum number of people that need to be present and voting (board quorum). This number differs in different countries. The company’s bylaws can also specify the board quorum.
- Voting: Recording the voting on the raised decisions will be required during the meeting. These will then have to appear on the minutes document, corresponding to the decisions that were made.
- Minutes: As the board secretary, it is your responsibility to take accurate minutes of the meeting. The minutes should record all decisions made and actions taken during the meeting.
After the Meeting
After the meeting requirements change significantly country to country and company to company. Some of the things that may be considered as conditional are sharing the draft of the minutes, where voting decisions were officially recorded. The final version of the minutes tends to be signed by the secretary and the president of the board. Members of the board will receive the document and can also be expected to sign it.
Organize and manage board meetings with Capboard
Organizing board meetings may not always be easy. With many members, complex processes, voting decisions, and legal requirements, it may feel overwhelming and time-consuming. Implementing the strategies presented above can be helpful but there is more to what you can use.
You can take care of the whole funnel and be able to ;simplify and optimize the process of organizing, managing and keeping board meetings compliant with Capboard.