Do you already know how to conduct your initial board meeting? What happens in that meeting?
The board members and the initial directors at this meeting will elect the first board of directors, process the approval of governing documents, and make resolutions. This initial meeting doesn’t have to be longer than necessary but it usually takes longer due to various issues that have to be discussed about the early stages of business operation.
Here are the suggested guidelines for conducting your first board meeting.
As much as possible, all directors of the company must be present for a quorum in order to formally establish and approve any decision that will be decided on the meeting whether to accept, modify, or change the bylaws and appoint corporate officers.
It should also be taken into consideration that before the appointed date and time for the initial meeting, a proper notice, along with the bylaws must be given to all directors and concerned individuals in advance.
a notice in advance is important in setting up a meeting, although it is fine not to have one in cases when all directors are present and do not question or oppose the lack of notice. However, a quorum may take place without some directors being at the meeting provided that each of them would sign a waiver of notice.
In instances when a director is unable to attend the meeting, it is a good practice to have him/her sign their name on the minutes of the missed meeting and write “approved”
RECORD THE MINUTES OF THE MEETING
The results of votes, resolutions, proposed ideas, and summary of the things that have transpired in company meetings or quorums must be recorded in the company minutes and must be kept either by the secretary or by a director.
The minutes should accurately represent everything that has been covered in the meetings. Specifically, it should indicate the location, the time, and persons who are present at the meeting, as well as any pertinent issues raised, their summary and the response to these issues, as well as the results of votes conducted, the ones who concurred and the ones who disagreed.
It is important to keep in mind that the minutes should contain all the information that a director who wasn’t present at the meeting needs to know.
APPROVE AND ADOPT BYLAWS
Knowing the importance of having a Corporate Bylaw to serve as the “handbook” in running business operations, it is important to set up a bylaw committee in the developmental stages of incorporation to draft the bylaws of the company.
Initially, these drafted bylaws are deemed and accepted as informal until the actual process of adoption takes place in the first board meeting with the majority of the directors voting in agreement on the resolutions where each director will only have one vote.
Each of the directors will sign the bylaws and the results must be recorded in the minutes.
NOMINATE AND ELECT BOARD OF DIRECTORS
In filing the registration for a business, the Articles of Incorporation will have an initial roster of the board of directors who are expected to set up and conduct the initial board meeting.
At the meeting, the initial board of directors will carry out the voting process as stipulated in the “bylaws” to elect the permanent board.
The permanent board of directors may not be the same roster of people from the initial board of directors. Although the word, “Permanent” is used to refer to the newly elected board of directors, the directors usually change on an annual or biannual basis.
DISCUSS PERTINENT RESOLUTIONS
While this step isn’t required at the initial board meeting, it would be good for the business to discuss matters in choosing a banking institution, having an insurance for the company, employing an accountant, as well as employee salaries and benefits to mention a few but most importantly, a decision to choose amongst the directors who would be authorized to sign contracts on behalf of the company has to be done, especially in transactions that relate to issuing of funds from the corporate account for different needs and concerns of the organization.