What Minutes Should Contain

It’s important that meeting minutes contain a number of items. Here are the most critical components of good minutes.

It’s important that meeting minutes contain a number of items. Here are the most critical components of good minutes:

Highlights of the topics discussed
A record of the decisions that were made. The resolutions should stand out. They can be in bold and numbered so that it is easier to extract them to the register of resolutions
Key factors upon which the decisions were based
Any discussion demonstrating the diligence of the board and that that directors were mindful of their statutory obligations in arriving at the decisions
Votes should be plainly reflected
Use plain English with no jargon
Avoid too much detail but say enough so that 5 years down the road you can look at the minutes and understand what was decided and why
Avoid incorporating documents by reference into the minutes without a thorough review of the documents first.
Also, beyond the narrative minutes, prepare an executive summary of the issues discussed, decisions taken, action points and those responsible for executing them, the agreed or preferred timeline for execution
For minutes in the financial sector, or where there is an active regulator, minutes will be more detailed than in other companies simply to demonstrate the level of diligence of the Directors.

In the corporate world, directors are statutorily mandated to act in the best interests of the corporation. There has been some recent debate concerning the time horizon over which such best interests are measured, but generally there is legal precedent that sets out what behaviour is expected of corporate directors.

In Member-Based-Organizations (MBOs), while directors must surely act in the best interest of the organization, depending on whether there is a representative nature in the selection of directors, other interests may be validly considered.

In any board of directors there is a principle of oversight of management. The board is charged with review of management’s actions to determine how the organization is performing. Often the review will be compared to what the plans are for the firm. Therefore it is necessary, with even the most grass-roots organization to engage in some sort of annual planning process. In more sophisticated organizations, an elaborate business plan may be developed by management and used by the board to gauge the performance of the MBO.

Many principles of corporate governance can be adapted for boards of MBOs. Caution should be used to make sure the policy adopted fits the organization. For example, as the organization has more volunteers and fewer staff, the planning process will be less elaborate but it is wise for the governance of the organization to at least have a budget predicting sources of income and expenditure in addition to identifying possible reasons why there might be a deviation from the predictions.

No matter how directors are selected and what political divisions may exist in the quest to be representative, those must be put aside in order to work together to accomplish the common goals of the organization.

Much has been written in the corporate sphere about how board members should behave in order that boards are effective at governance of the organization. The absolute first principle must be respect for fellow board members.

Recruiting Directors to Membership Based Organizations

Each organization will have its own mandate and culture which will influence the way directors are recruited. Here is some universal advice I can offer:

Describe the duties of directors in your organization. Is it strictly a policy board or are directors volunteers for the organization that also take part in the day to day work? Once a director’s “job description” is formulated it will be helpful in describing the job to prospects.
Are there any gaps on your current board? You may have had a director with certain skills retire. In that case, those skills will be easier to identify for the purposes of replacement. Alternatively, the activities of the organization may have changed such that you require certain experience to round out the knowledge on your board. Those gaps should be first identified then described in your recruiting material.
Understand why someone might want to serve on your board. Some boards are prestigious, while others are a stepping-stone to other work or provide a way for members to participate and “give back” because of commitment to the organization’s cause. It will help in your recruitment to know which of these motivators are significant reasons for serving as a director.
Be truthful about the amount of work involved and the expectations of a director. When you go to all the effort to recruit a good director you want to ensure that they likely will stay on for awhile. Surprising them with what may be more work than appears in the job description is a sure way to discourage a prospect.

There are many ways to tailor the recruitment of directors to your organization. It is important not to leave this important job to chance or word of mouth. The result of doing this task well will be more effective governance and more engaged directors.

Using Consent Agendas

More often than not, board members can find themselves in meetings that are filled with the least interesting and least challenging issues. Many board members and chief executives struggle to make board meetings valuable to the organization and the individuals in attendance. A consent agenda can turn a board meeting into a meeting of the minds around the things that matter most.

What is a Consent Agenda?

The consent agenda is a written set of items requiring formal board action and decision, but not discussion or debate at the time of the meeting. Materials are provided to the board well before the meeting, members are expected to review the items well enough to vote or make a decision without discussion. Thus, more time is prioritized for the issues at hand during the meeting.

Items may be contained for passage on the consent agenda only if all board members agree; if even one member considers a specific item to need discussion, it must be removed and placed on the regular agenda for the discussion at the board meeting. The ability to remove items and have them debated is a crucial aspect of use of the consent agenda. It is important to recognize this and establish as part of your board culture that directors will read the material and will take matters off the consent agenda that need further clarification or debate.

Things to regularly include on the consent agenda are those that usually do not inspire comment by directors or matters that are thoroughly canvassed in committee meetings. The board chair and the CEO need to be clear about the intended purpose of each item not on the consent agenda. It may be approval of a recommendation, guidance and advice, or brainstorming.

Directors will be expected to read the materials that accompany the consent agenda as well as those for the regular agenda. You should have some review mechanism in place to ensure that this happens. This definitely should be canvassed in your annual board assessment but directors should be mindful throughout the year.

Dashboards

A dashboard is information contained on a single piece of paper that summarizes important information so directors can chart performance with a glance. KPIs from the strategic plan can be on the dashboard.

The process of deciding what to include in the dashboard is one that should be made in consultation between the executives involved and the respective committee members in a process led by the committee chair. Each committee’s dashboard should be an accurate reflection of the performance of the credit union. Each committee meeting should ensure that the dashboard is an accurate reflection of the matters depicted.

Supporting materials can and should be reviewed to ensure that pertinent information is shared and extraneous information is not. Each committee can undertake a review with respect to the materials it generally receives. The Governance Committee can develop principles to be followed by management in deciding what to include.

Summary

Moving to a consent agenda may cause consternation because it requires a change from standard operating procedure and sometimes seems to minimize traditional board responsibilities and rituals. However, used properly, consent agendas facilitate board focus on the things that matter most. A consent agenda is not an excuse to cover up important issues; rather, it is an invitation to explore them deeply. Board members will grow to trust the work done by committees.

Using the consent agenda leaves board meetings for direction-setting, policy oversight and “big picture thinking.” Chief executives will hear different perspectives about critical issues and in the process they can ensure the board is knowledgeable about, and supportive of, key initiatives. Board members, in turn, will feel that their time is well spent; they will feel valued and satisfied.

Credit Union Board Responsibility for Director Recruitment

Credit unions adhere to co-operative principles, one of which is a commitment to open democratic member control. Some credit unions have refused to be overtly involved with the election of directors, in the belief that to do so would offend those democratic principles. In those cases, it results in both the board and management playing a much smaller role in board succession than their private sector peers.

However, fully two-thirds of co-op boards are also involved in selection, i.e. in the presentation of the names of individuals to the membership for consideration.

A credit union board can respect democratic principles while providing for its own succession. The board can recruit and should endorse candidates for election. When it does so, the members have the ultimate authority to accept or reject the board’s recommendation. This preserves the democratic member control envisioned in the Co-op Principles.

As Canadians, we are familiar with elections for public office. The situation with co-operative boards differs in many respects from those elections: the nomination process and party system screen candidates to make sure their views align with the stated views of the party. The officials’ performance will be recorded by the media and eventually evaluated by the public.

An individual elected to a credit union board of directors is in a very different situation. Most credit unions do not have any political parties or alliances to identify candidates, so absent a nominating committee, the screening is done by the rules setting the requirements to run.

Another difference is that the performance of directors takes place in the boardroom where much of the credit union’s business is confidential until released. This makes it nearly impossible to hold a candidate to account for election promises because no one knows whether the matter was even raised by that candidate, never mind convincing the board to take action.

Third, the board of a credit union acts as a whole. While vigorous discussion should be encouraged within the meeting, once the board makes a decision, all directors should stand by it. They definitely should not discuss it or oppose it outside the boardroom. If a director feels that s/he must openly oppose a board decision, s/he must resign. This is the duty of loyalty that directors owe to the credit union.

A credit union can respect the power and control in the hands of the members with both involvement in the election process and transparency of factors in the decision-making.

Getting Started: Evaluation of Skills and Attributes

It is up to the board to identify the skills, traits and characteristics that will add value to the board. The board can start by identifying the characteristics and skills of what makes a good board member. Corporate director training has developed many templates that can be used.

Because credit unions are, in effect, mission based organizations, the potential director’s alignment with the vision must be a key criteria in selecting board members. Other than that, Credit union director skills and attributes will only differ slightly from those directors on corporate boards. It may more be a matter of emphasis than credit union directors needing different skills than their corporate counterparts. The credit union board needs to be thoughtful and deliberate when cataloguing the desired skills and attributes of a board member.

When determining how the board should add value to the organization, start with a review of the credit union’s vision and strategy. Once this is considered, the specific skills the Board will need to assess the strategy and oversee its execution can be more easily determined.

The evaluation of board member requirements should happen when the your nominating process is changed over and every few years thereafter. In this way, the board can confirm whether it was correct in its observations. The board will also be responsive to changes in circumstance on the board, especially changes to board composition and the strategic plan.

Identify Upcoming Needs

The board knows what it does and where it has, had or expects difficulty with some tasks or obligations. It knows what the strategic plan contemplates in the future and how that is different from the current business model being pursued. That knowledge allows the choosing of those skills attributes and characteristics that the board needs for the immediate future. The desirable skills, characteristics and attributes can be further discerned by examining the recent work of the board. Look at:

• Strategic Plan
• Minutes of Committee meetings
• What kinds of experts have you hired to provide the board with advice?
• Results of board and board member evaluations to see where gaps have been identified

Depending on the board’s relationship with them, it may want to engage the CEO and senior management in helping with the descriptions of the characteristics needed on the board. Often the CEO has great insight about what is needed on the board. Be mindful that 32% of large Co-op boards said that management had the most influence in selecting new directors. I do not recommend asking the CEO to identify individuals, merely the characteristics and attributes needed for the board.

Skills That Directors Need

The evaluation of board member requirements should happen every year and should b the basis for board member recruitment. In this way, the board can be responsive to changes in circumstance on the board, especially changes to board composition and the strategic plan.

Choose from among those skills that the board has determined are important. The specific technical skills needed by the board may change over time, depending on the board’s needs so the assessment should be conducted each year. Typical technical skills that the board may want are:

• Financial/Accounting Expertise – designation?
• Communication Skills
• Marketing Skills/Experience
• Regulatory / Legal Knowledge
• Risk Management Knowledge
• Experience in Strategy Formation & Implementation
• Experience in Human Resource Management
• Experience in Small or Medium-sized Business
• Negotiation / Meditation Experience
• Senior Management Experience

Boards will also want to investigate the “softer” skills desired and possessed by board members. Such skills include:

• Alignment to the Vision — as already mentioned this is probably the most important aspect for a new director to possess. It ensures that s/he will be pulling in the same direction as you steer the credit union to future successes.
• Integrity — they have personal integrity and insist that the firm behaves ethically.
• Courage — they have the courage to ask tough questions and to voice their support of or opposition to management proposals and actions. Their loyalty to the members’ interests may demand that they express dissent and persist in demanding answers to their questions.
• Good judgment — they focus on the important issues and base their decisions and actions on sound business and common sense.
• Perspective — they have broad knowledge and experience that they apply to discussions and decisions.
• Commitment to learning — they are prepared to take the time to get to know the credit union, know their job and stay up to date. They take responsibility for their own education in areas of their contribution to the Board and participate in educational sessions offered by the CU.
• Independently Minded — suspends decision making until all arguments are made and is not swayed by “group think.”
• Strategic Thinker — can see the long-term impact of proposals as well as how they can aid or impair the credit union’s operations.
• Consensus Builder— takes others’ inputs and builds to a better conclusion.

Be sure that any candidate for director is aligned with the vision and values of the credit union. Make sure that s/he wants it to succeed. Also important is the potential director’s character. It is a familiar adage that boards should: “Recruit for character and train for competence.” While skills are important, they can be attained after election to the board.

A director can be highly skilled in a particular competence yet poor in alignment and behaviour. Directors can be trained in the skills necessary for a board position but is often impossible to train for character once a director has been elected.

Author: admin