Board Meetings Without Minute Takers; Not Good

By Raul Rivera

 

Key point:  A board meeting without minutes, is not a board meeting.

I recently had a conversation with an administrator who had just joined the staff of his church.  He mentioned that in the three months he had been there, he had found no trace of any board meeting records for the last decade.  He asked what could happen if he could not find any minutes.  My reply was simple:  A board meeting without minutes is merely fellowship.  When a church has a board meeting, it MUST be documented.  Minutes must be taken and properly formatted.  The minutes are documented discussions and decisions made by the board of directors.  Those minutes must also be read by each board member and approved by a vote of the board.  If the board got together and had a board meeting without minutes, the board simply had a time of fellowship.

What if my board members live in different cities or states?

If your church started out with board members living in different states, you understand the difficulties in gathering for a meeting.  The answer to this dilemma lies in your bylaws.  What your bylaws state about board meeting minutes can make or break you.  Every church, ministry, and any other type of nonprofit should include language in their bylaws that allow for board meetings to take place through electronic means.  State laws make provisions for this, so why not have clauses within your bylaws that allow for electronic means of attendance at a board meeting and unanimous written consent by email?  These provisions allow board members that live in other states to participate as if they were physically at the meetings.

Different types of board meetings

The laws of all 50 states clearly require that, at a minimum, one board meeting take place and that minutes be taken to document the decisions made. This meeting is called the annual meeting of the directors.  In this meeting, you discuss salaries, policies and procedures, housing allowances, retirement programs, insurance, financial reports, and a myriad of other items.  This is often known as the big board meeting of the year.  

The other type of board meeting is known as a special board meeting.  This type of meeting takes place throughout the year in between annual meetings of the directors.  It is to discuss plans and things that are important enough that they cannot wait for the annual meeting.  Below are some things that come up during the year that require special board meetings.   

1. Building repairs
2. Hiring an employee
3. Major purchases such as real estate and automobiles
4. Loans
5. Resignations
6. Member disputes
7. Amendments to legal foundation (bylaws, articles of incorporation, ordination programs, etc.)
8. Adopting new policies
9. Adding or removing a board member
10. Discipline of church member

How to Keep Minutes

Below is a quick checklist of how to properly schedule a board meeting and how to keep meeting minutes.  Our resource, titled Corporate Records Kit , will teach you step-by-step how to maintain board meeting minutes along with all of your other corporate records, including the corporate seal.

1. Create an agenda and properly format it with the call to order, reading of previous minutes, new business, old business, etc.
2. Send out the notice of a board meeting to each board member, giving sufficient time as required by your state's law.
3. Create an attendance list and use it to keep attendance of those present and those absent.
4. Keep detailed notes of the discussions and decisions using a form based on the agenda (StartCHURCH provides that form in the Corporate Records Kit).
5. Use the notes to create the actual minutes using the format we recommend in our Corporate Records Kit.
6. Send a copy to each board member.
7. At the next board meeting, ratify the copy of the minutes you sent to each board member.

Minutes and Corporate Records

What good will board meetings be if the minutes do not appear in the corporate records?  Section 16.01(a), The model corporation of 1987, states that "A corporation shall keep as permanent records minutes of all meetings . . ." It also states that the corporation shall keep the following records in the office of the church or ministry:

1. Articles, or restated articles, of incorporation and all amendments to them currently in effect;
2. Bylaws, or restated bylaws, and all amendments to them currently in effect;
3. Resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations and obligations of members, or any class or category of members;
4. Minutes of all meetings of members and records of all actions approved by the members for the past three years;
5. All written communications to members, generally within the past three years, including the financial statements furnished for the past three years;
6. A list of the names and business, or home, addresses of its current directors and officers;
7. Its most recent annual report delivered to the secretary of state.

Final Thoughts

A federal Court in Washington ruled that a church did not have a valid board of directors because minutes were never taken to document the election or appointment of the actual board members.  Failure to keep minutes allows for a court to pierce the corporate veil.  Additionally, in an audit, the only proof you have to show that your ministry operates in a manner consistent with your purpose, bylaws and section 501(c)(3), is well documented board meeting minutes.   Failure to keep minutes may cause you significant grief.

 

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