A Board Resolution – What it Is and How to Write One
Board resolutions are a formal means to record and document the decisions made at a board meeting. They can help ensure that the decisions are in line with the federal, state and local laws and regulations. They also help reduce the legal risks that arise from these decisions.
The decision being considered is something as minor as a change in employee work hours or as significant as shutting down a business, the board must have a documented record of it. The board must also be able of demonstrating the rationale of the decision to ensure that any outsiders can understand the reasons behind it and if it was the right decision.
Writing a board resolution can be an overwhelming task. However, by educating yourself on the purpose of these documents and making use of the appropriate tools to compose them you can make the process much easier.
A Board Resolution: What it is and how to write one
The board needs to document important decisions that affect shareholders or the company in a formal way. These decisions are called resolutions by the board. They aid in establishing clear policies regarding governance and ethics. These resolutions are also used to show the board dedication to transparency within the company.
Board resolutions can be passed at a board meeting or in more modern times, they may be approved through written resolutions. When writing a resolution, it must start with the words “WHEREAS”, which highlights the subjects that were discussed during the board meeting. Then, the resolutions are added. The document must be signed by each director who attended the meeting.