A Board Resolution – What it Is and How to Write One
Board resolutions are an official method of recording and documenting the decisions taken at a board meeting. They assist in ensuring that these decisions are in line with the federal, state and local laws and regulations. They also reduce the legal risks that may arise from these choices.
The decision being considered is something as minor as a change in employee http://fishboardroom.com/how-to-run-an-effective-workshop-and-board-of-directors hours or as major as shutting down a company the board must keep an official record of the decision. The board must also be able explain the reasoning behind the decision, in order that anyone outside of the organization can understand the reasons behind the decision and whether it was the correct decision.
Thus, composing the board resolution is a daunting task. By knowing the purpose behind these documents, and using the right tools to create them to make it much easier.
A Board Resolution: What it Is and How to write one
When the board makes crucial decisions that impact shareholders or the company, they need to record these decisions in the formal manner. These decisions are known as board resolutions and help to establish clear guidelines regarding issues like governance, ethics, and risk management. These resolutions also serve to show the board commitment to corporate transparency.
Board resolutions can be adopted in a physical board meeting or, in more modern times, they can be passed through written resolutions. If resolutions are written, it must begin with a “WHEREAS” statement that draws attention to the topics discussed during the meeting before moving on to the resolved statements. Once the document is complete it has to be signed by all directors who were present at the meeting.