A board resolution or corporate resolution is a document that holds the actions of a board of directors meeting. When a board of directors holds a board meeting, they make decisions for the company’s benefit and growth. This record of decisions is called a board of resolution. A board of resolution is a document that details the events of the meeting: Who said what, when, and what actions were taken, and so on.

In a board of resolution, nothing is left out. This is an extremely detailed document and considered legally binding. Board resolutions generally cover one issue.

When is a Board Resolution Needed?

A board resolution is necessary whenever the company deems it so. Board resolutions exist so the company can keep track of its operations in a logical, timely, and efficient manner. Companies and their shareholders use board resolutions to check up on the progress of the company. After all, the board of directors of a company acts on behalf of its shareholders, so it’s one way of keeping the shareholders informed.

In short, a resolution is a chance for a company or organization to give attention to certain problems or situations and serves as proof that the issue was addressed.

Some common reasons for a board of resolutions include, but are not limited to:

  • Appointment of new members
  • New hires
  • Shareholder decisions
  • Non-profits and funding distribution
  • Keep track of all decisions made at board meetings

Types of Board Resolutions

I’m sure many of us have seen films which contain scenes where the board of directors is voting “yea” or “nay” on a resolution of sorts, and that’s just how it is in real life. When a board votes on a decision, each member responds with a simple yes or no answer. There is no debate here. Whichever holds the greater amount of votes, secures the win. There are three basic types of resolutions: Ordinary, special, and unanimous.

Ordinary Resolutions

Ordinary resolutions require nothing more than a basic majority vote for either yes or no to pass. This means that if 12 votes are cast, the resolution only requires a total of 7 votes to win.

Special Resolutions

Special resolutions are slightly different than the simple majority vote found with ordinary resolutions. Here, the topic requires a higher percentage. For instance, if the board sets the percentage at 75 percent, then the resolution only passes if it gets 75 percent or more of the vote, nothing less.

Unanimous Resolutions

A unanimous resolution is just as the name implies: All board members must agree for the resolution to pass.

What to include in a Board Resolution

When it comes down to writing your own board resolution, certain specifics must be attended to. Remember, though not a legal document in and of itself, it can be used in a court of law. As such, there are certain elements that must be included in the document.

  • First things first, and that’s the date and time of the meeting, along with the resolutions title. If the resolution has an identification number, such as a serial number, you must include that as well.
  • When you begin to write the body of the document, you must begin each paragraph with the word, “Whereas”.
  • The tone of the resolution is to be professional and formal
  • The first sentence of the resolution states the board’s responsibility on the issue. For instance, “Whereas it is the responsibility of the board to attend to new hires…”
  • After the first sentence, continue the text by including each statement of the resolution.
  • The final statement is reserved for the final resolution. The final resolution states what the board decided to do.
  • The last part of the resolution is a list of all those who voted. Next to their names, record the vote, be it a yes or no.
  • Finally, a designated area for the boards president to sign and date the resolution.

Board Resolution Templates & Examples

Tips for Writing a Board Resolution

A resolution can be thought of as a method of stating what a group of people, such as members of the board, intend to do. They are a formal way to address issues of concern to the company or organization. A board resolution document is also a record that an issue was dealt with if it comes up again. Below are some tips to go over as you write your own.

  • Keep it simple
  • Make certain that the issue at hand has not been addressed previously
  • Do your research
  • Any research should support any statements or statistics in the resolution
  • The tone should be professional yet simple. Use action-oriented language such as: Endorsing, affirms, concludes, declares, and so on.
  • Clarity is paramount. Avoid assumptions, vague language, or indirect language

When corporations or charity organizations need to address a concern and take action on that concern, they create a document called a board resolution. Actions can be anything from appointing new members to the board, or deciding which charities are receiving funding. While not difficult to compose, they can be tricky, as they need to comply with a certain format. This includes a formal title, document number, and date the meeting took place. The resolution should be brief and concise, using simple, action-oriented language, and conclude with a list of board members, how they voted, and the signature of the president.



Source link

Looking For Document Management System?
Call Pursho @ 0731-6725516

Check PURSHO WRYTES Automatic Content Generator
https://wrytes.purshology.com/home

Telegram Group One Must Follow :

For Startups: https://t.me/daily_business_reads