Business Transition Consulting LLC

States vary on whether annual board and shareholder meetings need to occur. Obviously, if the state of the incorporation of the corporation is a state requiring those meetings to be held, the statutes should be reviewed to determine that the agenda for the meeting includes all required elements.

On a more practical level it helps to think about the reason for having and taking minutes of a board meeting. Although the corporation is treated as a legal entity (an artificial person), the corporation obviously has no voice and no way to communicate decisions unless it is the written documentation of the action of the board of directors (and owners at shareholder meetings). This is the primary result of the meeting, in fact, in most states the meeting does not have to be held if the directors (or shareholders) unanimously agree to the writing documenting the action of the directors (or shareholders).

In most cases the action to be taken (the agenda items) by the directors would be the following: review of the financial statements of the prior period (usually quarterly or annually), review of the executive officers, ratification of actions taken by executive officers, election of executive officers, review and approval of employment agreements (if any), review of compensation (including bonuses), approval of strategic planning, and resolution of board administration issues. The board of directors is the business policy making element of the business, and the minutes of its meeting should state and set that policy.

In most cases the action to be taken (the agenda items) by the shareholders would be the following: review and revision of shareholder agreements and election of the directors to the board of directors. The principal function of the shareholders meeting is to place the board of directors and ensure its viability. In owner managed businesses, these people are the same and the agendas for the meetings tend to get confused between owner issues and policy issues.

With this in mind I see no real benefit in recording (video or audio) these meetings. Attention should be paid to the written documentation of the meetings. The best practice is to have an appointed secretary takes notes at the meeting and produce minutes. The minutes should not focus on what was discussed but accurately state what decisions were made. These minutes are reviewed and approved at the next meeting. The benefit is to produce a succinct and clear documentation of the action taken. This is the voice of the corporation.