Board resolutions are an official method of documenting and recording the decisions taken during a board meeting. They aid in ensuring that the choices made are in line with local, state, and federal laws and regulations. They also help to minimize any legal risks that might result from these choices.
The board must keep track of all decisions, no matter how minor or significant they may be. The board should also be able provide the rationale behind the decision, so that everyone outside can comprehend why the decision was made and determine if it was a correct choice.
Writing a board resolution can be an intimidating task. However, by educating yourself on the purpose of these documents and using the right tools for composing them to simplify the process.
A Board Resolution: What it is and How to write one
When the board makes important decisions that affect shareholders or the company, they must record these decisions in a formal manner. These decisions are called resolutions of the board. They provide clear guidelines in areas such as governance and ethics. They are also used to demonstrate the board’s commitment to corporate transparency.
Board resolutions are approved at a physical meeting of the board or in recent times, via written resolutions. When the resolution is written it should begin with an “WHEREAS” that outlines the topics that were discussed at the board meeting. Then the resolved statements are added. The document must be signed by each director who attended the meeting.
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