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Board resolutions are a formal method of recording and documenting decisions made at meetings of the board. They help to ensure that these choices align with local, state and federal laws and regulations. They also help to minimize any legal risks that might result from these choices.
If the decision is as simple as a change to employee work hours or as important as shutting down an enterprise the board needs to keep an official record of the decision. The board also must be able to demonstrate the reasoning of the decision to ensure that any outsiders can understand why it was made and whether or not it was the right choice.
Composing a board resolution is a daunting task. However, by educating yourself about the purpose of these documents and using the appropriate tools to create them to make the process much easier.
What is a Board Resolution? And how do you write one?
The board needs to document important decisions affecting shareholders or the company in a formal way. These decisions are referred to as resolutions of the board. They assist in setting clear guidelines in areas such as ethics and governance. They are also used to demonstrate the board’s dedication to corporate transparency.
Board resolutions can be passed at a physical meeting of the board or more recently, via written resolutions. When the resolution is written it must begin with the wording “WHEREAS” that 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.
