Essentials for Writing a Good Corporate Resolution

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Essentials for Writing a Good Corporate Resolution

By David Gass

A corporate resolution is an essential part of corporate governance. The systematic recording of the events, decisions and proceedings of board meetings are part of corporate resolutions. While writing a professional corporate resolution, we need to follow few things carefully. First, the focus should be covering all the relevant arms of the corporate resolution. A corporate resolution should be brief, to the point and informative. Since a corporate resolution can be used or referred even after couple of years from its passage, it becomes all the more necessary to file and record it more systematically.

Essential Features of Effective Corporate Resolution:

Adhering to the following can help in making an effective corporate resolution:

Designing a corporate resolution form, this on completion gives a comprehensive view of all the aspects.
It should convey the assertion of board of directors in brief and effective words.
Voting results and the pattern of voting on each subject should be carefully noted.
Implementation of the decisions and subsequent steps undertaken to comply with the decision should be duly addressed almost as soon as these take place in order to avoid any lapses or deletion in them.
Other standards or the formalities should also be adhered in the form.
Exhaustive recording of the corporate minutes is most essential.
Hierarchical recording of the proposed resolution, decision of the directors and the subsequent accountability of further implementation of the decision helps immensely.
Accurate recording of the decisions related to the dividends and the steps taken to reach this decision, is mandatory.
Detailed recording of the loans and taxes/penalties (if any) paid. The recording should not be in connivance to the related documents and care should be taken to weed out any possibilities of deviation from the recorded version.

The Chairman of the board of directors is the person designate to preside over the meeting or Co-Chairman/ the Chief Executive Officer (CEO) or a director in the absence of Chairman is authorized to preside over the meeting. The corporate resolution and its minutes are arranged in consultation with this person designate. Agenda of the meeting should be decided well in advance and all the participants should be notified accordingly. The agenda and the minutes should be recorded in the corporate resolution; care should be taken to avoid any deviation from the original one.

An ideal corporate resolution consists of all the major aspects discussed above and consciously guiding the future actions. An effective corporate resolution not only records the proceedings and the basic intent of the board about any particular subject but also gives a glance into the future actions and the implementation of the resolution. Hence in case of any audit/inquiry (external or internal) in the future, the decisions could be interpreted to precision. Also a right upkeep of the records is advisable as per the law and gives the company a cushion to fall upon when required. A corporate resolution is a fine referral point for any future preposition comparable to the older one. Also if a move or a decision backfires, the record can be referred for analyzing the weak link. There are softwares available nowadays for writing a more professional and effective corporate resolutions.

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