In November 2018, Commonwealth Bank of Australia (CBA) chair Catherine Livingstone was in the dock at the Hayne Royal Commission with Rowena Orr, QC who quizzed her about the keeping of CBA’s minutes. One of the issues raised during the banking Royal Commission was why the minutes of specific CBA and NAB board meetings did not contain records of discussion or questions raised by directors. This query was raised by the Royal Commission because a failure to comply with the requirements in relation to the keeping of minutes is an offence under section 251A of the Corporations Act 2001.
The Royal Commission indicated the possibility that if something isn’t included in the minutes, then whether it occurred at all can be questioned. That turns the approach to minutes, established by the James Hardie case, on its head. Minutes aren’t just evidence of what did happen but can also be evidence of what didn’t happen. When you are dealing with difficult matters, it should be demonstrated in the minutes that directors were not just passive participants. The court expects companies to show directors were thinking about the key issues and looking for ways to address them.
Every company secretary must manage a fine line between too much information and not enough. Minutes are not intended to be a transcript of what happened. It remains unhelpful to take a very fulsome view of minutes, but there has to be enough in there to record what was discussed and the issues that arose. It should be designed to jog the memory of those present and demonstrate that the board’s processes leading to its final actions met necessary standards of board performance. In other words, it is a record of the meeting, which is more meaningful than a list of resolutions and action items. An eloquent summary of the key themes discussed by the board offers more powerful insight than a blow-by-blow account of a lengthy discussion.
If you unsure of your obligations in compliance with the record keeping requirements under the Corporations Act, you are welcome to contact our team of experienced commercial lawyers by clicking here to submit an online enquiry form or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange conference or appointment.