Board resolutions are an official way to record and document the decisions taken at meetings of the board. They aid in ensuring that these decisions are in line with local, state, and federal laws and regulations. They also minimize any legal risks that could arise from these choices.
The board must keep a log of all decisions, no matter how minor or significant they might be. The board must also be able explain the reasoning of the decision so that anyone who isn’t a member of the board can understand the reasons behind the decision and if it was the correct decision.
As such, composing an official resolution for a board can be a daunting task. By learning the purpose of these documents and utilizing the right tools to write them and make it a lot easier.
What is a Board Resolution? how do you create one?
When the board takes important decisions that impact shareholders or the company, they need to document these in an official manner. These decisions are called resolutions of the board, and they provide clear guidelines in areas such as governance and ethics. Resolutions are also used to show the board commitment to transparency fishboardroom.com/secrets-of-managing-the-activities-of-a-legal-entity/ of the company.
Board resolutions can be adopted in a meeting of the board or in more modern times, they may be approved through written resolutions. When a written resolution is created, it must start with the wording „WHEREAS“ which outlines the topics that were discussed at the board meeting. Then, the resolutions are added. The document must be signed by every director who attended the meeting.