Corporate Recordkeeping Keeps You Out of Trouble
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Corporate recordkeeping preserves a staffing company’s history of business and financial decisions. Unfortunately, creating and maintaining accurate records is often overlooked. It’s more than just a corporate formality; recordkeeping is a critical element of directors and officers liability loss control.
For corporate executive management, maintaining accurate records—most importantly, documenting key business decisions and the context in which they were made— not only builds a clear financial and business foundation for future decisions, but also reinforces a director’s or officer’s case in the event of litigation.
Documenting Decisions: Board Meeting Minutes
Business decisions that require board member or shareholder participation necessitate the creation of board meeting minutes to capture the details and context of decisions made. Meeting minutes serve as an important area of directors and officers liability loss control. If any business decision is questioned by shareholders, auditors, donors or regulatory agencies later on, directors and officers can bolster their defense with accurate, detailed minutes that can serve as the chief piece of evidence for their side of the case.
Directors and officers should expect that board meeting minutes will be subpoenaed as evidence for a potential lawsuit; therefore, minutes should be prepared with diligence and detail. The minutes should be accurate and should include:
- A list of the attendees of the meeting and who was absent
- A detailed account of what occurred at the meeting
- A list of voting results, including the names of those who voted in favor and those who dissented
- Copies of any supporting documents distributed at the meeting and a reference to those documents
In the event of a lawsuit, directors and officers cannot claim ignorance or absence when decisions were made that resulted in corporate wrongdoing. Directors and officers who are unable to attend a board meeting should review the meeting minutes to find out what decisions were made. If they disagree with a decision made in their absence, they should submit their disagreement in writing to include with the record.
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