Corporate Record Keeping: Practical & Important Risk Management
Corporate record keeping preserves a company’s history of business and financial decisions. Unfortunately, creating and maintaining accurate records is often overlooked by companies of all sizes. It’s more than just a corporate formality; corporate record keeping is a critical element of directors and officers liability risk management and loss control.
Corporate Record Keeping and Liabilities
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 may bolster their defense with accurate, detailed minutes that can serve as the chief piece of evidence for their side of the case.
Detailed Corporate Record Keeping
Directors and officers should expect that board meeting minutes will be subpoenaed as evidence for a potential lawsuit; 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 favour 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 must review the meeting minutes.
To learn more about corporate record keeping, ways to improve corporate governance or other risk management solutions call 1-866-287-0448 to speak to an ALIGNED Insurance advocate or connect with us today at www.alignedinsurance.com
