When a corporation acts, its minutes document and prove that it acted. If the minutes do not record that the board of directors by majority vote approved a decision, it did not happen.
The corporate record is critical to document corporate decisions, and the minutes are a critically important part of the governing process. The ultimate board member’s nightmare is to be accused of acting without corporate authority, and then discovering the minutes do not record the authority they thought they had. In that situation, the director should seek a ratification vote as soon as possible.
Minutes are not a meeting transcript. What “somebody said” is not recorded in the minutes – even if they demand “make sure my comment is in the minutes!”
Minutes are intended to document that the board met on a given date, that certain directors attended, that certain motions were made, and certain reports were received.
Many secretaries and managers work far too hard on “trying to get everything down,” and are therefore unable to meaningfully participate in the meeting as they try to get everyone’s remarks summarized. Some boards believe they should also summarize open forum comments, but this is not required.
Board meetings are not membership meetings, and the audience does not make motions or vote. It is sufficient to simply note that an open forum was conducted. The good news for minute-takers is you can stop trying to compete with court reporters! Normally, meeting minutes should be about two to three pages.
Many committees take minutes of their meetings. However, committees normally do not make decisions, except for the HOA architectural committee. The normal output of a committee is recommendations to the board for action on topics within the committee’s charter. So, the record of the committee’s actions should be embodied in the committee report, which should be written.
The minutes should also reflect the board received the report. It is not necessary for the board to “approve” the report unless there is an action item recommended that is also posted in advance on the agenda.
I am often asked what to do about executive session minutes.
Executive session handles some limited but very sensitive subjects behind closed doors, and many boards and managers prefer to keep closed session minutes.
Most closed session discussions (contract formation, hearings, payment plan proposals, etc.) involve a document coming out of the closed session (contract, notice of hearing outcome, payment plan confirmation), and Civil Code Section 4935(e) requires that executive session decisions be “generally noted” in the next open meeting minutes. Given these two factors, I question whether closed session minutes are necessary. Boards and managers should consult with their preferred legal counsel about this, to see if these sensitive minutes are to be created.
If minutes are not overly burdened with comments and discussion summaries, it should be easy to have draft minutes ready shortly after the meeting adjourns. Often when an association repeatedly violates Civil Code Section 4950 by not having draft minutes of the meeting available within thirty days of the meeting, it is because the minutes contain far too much unnecessary detail.
Questions also frequently arise about video or audiotaping of HOA meetings to increase the accuracy of minutes. However, this is unnecessary if the minutes stick to the basics.
Kelly G. Richardson CCAL is Partner of Richardson Ober DeNichilo LLP, a California law firm known for community association advice. Send potential column questions to Kelly@rodllp.com.
Source: Orange County Register