Board resolutions are a formal way to record and document the decisions made at a board meeting. They can help ensure that the decisions are in line with the federal, state and local laws and regulations. They also help reduce any legal risks that may arise from these decisions.

The board must keep a log of any decisions, regardless of how minor or significant they might be. The board must also be able to explain the reasoning behind the decision, so that anyone outside can understand the reasoning behind the decision and if it was the correct choice.

As such, composing a board resolution can be an intimidating task. But, by being educated about the significance of these documents and making use of the appropriate tools to create them to make the process much simpler.

What is a Board Resolution? And how do you create one?

When the board makes significant decisions that impact shareholders or the company, they need to record these decisions in the formal manner. These decisions are referred as resolutions of the board. They help to establish clear policies regarding issues like governance, ethics, and risk management. These resolutions can also be used to show the board dedication to transparency within the company.

Board resolutions can be adopted in a meeting of the board or in more recent times, they can be approved through written resolutions. When a resolution is written, it must start with a “WHEREAS” statement that summarizes the subjects discussed at the meeting prior to moving on to the resolved statements. The document must be signed by every director who attended the meeting.