In Camera: Should a Board Record?

It is quite common for board members to meet in the absence of management and they may want to have a detailed record of the meeting. The question, however, remains to ‘record’ or ‘not to record’, as this may have legal issues and create a conflict of interest or duty on some board members present in the meeting. There are varied opinions as to what is considered good governance or best practice in a board meeting, but the ‘one’question that is persistently asked for many organisations is “Should board meetings be recorded?”

Usually, it is the Company Secretary that takes the minutes of the meetings. Minutes generally perform two roles. A summary of the significant facts, statements, and discussions in the meeting. If there were any resolutions, what were the resolutions, who moved them, and whether they were passed or not. The Chair or the CEO is not expected or advised to take the minutes as they are encouraged to actively participate in the meetings rather than be loaded with administrative tasks. While some boards allow the minutes to simply point out that the meeting was held on camera, others go the extra mile to have a clear description of the meeting in the minutes. Before taking the decision to record a board meeting, you need to consider the following factors:

Legal Issues

Unless the constitution demands it, it is important to fully consider the legal implications of recording a meeting, if there are any. Some meetings may lead to formal actions; it is thus advisable to record them so that the resolutions can be easily tracked in subsequent meetings. However, a few possible legal dangers of tape recording a meeting might surface eventually. There may be a conflict of interest for one or more of the board members present which may lead to lawsuits. It is quite difficult to prove oral defamation or other forms of damages when it is not recorded. But if there is a record, you can easily prove who said what and when, which ultimately makes it possible for defamation or damages claims. Privacy issues may also arise as it is impossible to have an “off” the record tape-recorded meeting.

Practical Issues

There are also many practical reasons why tape recording of a board meeting is not usually adopted by the board members. Many directors do not appreciate being monitored with every word they say and action being analyzed.The psychological impact of having an on-camera meeting is that many members are not free to frankly express themselves and often times the meeting is tame. Many board members will consequently not be able to make their claims, partake in robust decision making and discussions and question issues. The issue of having a meeting on camera can encourage conflict between board members as not all would accept it.

The morale of board members and staff can be adversely affected as it could be perceived as a lack of trust and a device for a ‘witch hunt’. Members may take advantage of it by requesting that the tape is turned off just to say what they want to say which may be oppressive to other members. The board will need to invoke some rules in order to block this move in a case where the meeting is held on camera. The question of ‘why?’ – What is the need and how will on camera meetings improve the due diligence and governance of an organisation? This may continuously have a negative impact on its implementation.

Conclusion

The usual response of Directors who want to record meetings centres on getting accurate statements made during board meetings accurately on the record and reflected in the board minutes. Consequently, a Board should develop a policy on minutes and the meetings that should be recorded, which will help effectively deal with these issues.

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