A Board Resolution – What it Is and How to Write One

Board resolutions are a formal way of recording and documenting decisions made at a board meeting. They ensure that the decisions taken are in line with local, state and federal laws and regulations. They also help to reduce the legal risks that result from these decisions.

The board must keep a record of all decisions, no matter how small or significant they may be. The board must also be able to show the reasoning behind the decision, in order that everyone outside can comprehend why the decision was made and determine if it was a best choice.

Thus, composing a board resolution can be an intimidating process. By learning the purpose of these documents, and utilizing the right tools to create them and make it much easier.

A Board Resolution: What it is and How to Write One

When the board makes crucial decisions that affect shareholders or the company, they must document these decisions in the formal manner. These are referred to as resolutions of the board. They help to establish clear guidelines on matters such as governance, ethics and risk management. Resolutions are also used as a way to demonstrate the board dedication to transparency within the company.

Board resolutions are approved in a formal meeting of the board or in recent times, via written resolutions. When writing a resolution it must begin with the wording “WHEREAS”, which highlights the subjects that were discussed during the board meeting. Then, the resolutions are added. After the document has been completed it must be signed by all directors present at the meeting.

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