how to write a board resolution

3 min read 23-01-2025

A board resolution is a formal record of a decision made by a company's board of directors. It's a crucial legal document, providing evidence of the board's actions and authority. Knowing how to write a board resolution correctly is essential for maintaining compliance and avoiding future legal issues. This guide will walk you through the process, ensuring your resolutions are clear, accurate, and legally sound.

Understanding the Purpose of a Board Resolution

Before diving into the specifics of writing, let's understand why board resolutions are so important. They serve several key purposes:

Legal Documentation: Resolutions provide undeniable proof that a specific decision was made by the board. This is vital for legal and financial purposes.
Corporate Governance: They demonstrate adherence to corporate governance best practices and internal controls.
Record Keeping: They maintain a complete and accurate record of board decisions, crucial for transparency and accountability.
Authority: Resolutions grant the necessary authority to individuals or entities to act on behalf of the company.

Essential Components of a Well-Written Board Resolution

A well-structured board resolution typically includes the following key elements:

1. Heading and Identification

Name of the Company: Start with the full legal name of the company.
Date: Clearly state the date the resolution was adopted.
Resolution Number: Assign a unique number for easy reference and tracking. (e.g., Resolution No. 2023-10-27-01)
Meeting Details: Include the date and location of the board meeting where the resolution was passed.

2. Recitals (Optional but Recommended)

This section provides context for the resolution. It explains the background and reasons behind the decision. While not always necessary for simple resolutions, recitals are beneficial for complex matters. They might include:

A brief summary of relevant facts.
References to any previous resolutions or agreements.
The rationale for the decision.

3. The "Resolved" Clause

This is the core of the resolution. It clearly and concisely states the decision made by the board. Begin this section with the word "RESOLVED," followed by the specific action being taken. Use clear and unambiguous language. Avoid jargon or overly technical terms.

4. Action Items and Authorizations

This section outlines the specific actions that need to be taken to implement the resolution. This might include:

Appointing individuals to specific roles.
Authorizing the execution of contracts or agreements.
Approving financial transactions.
Delegating authority to specific individuals or committees.

5. Attestation and Signatures

This final section formally confirms the adoption of the resolution. It should include:

Signatures: Signatures of the board members present and voting in favor of the resolution. Include printed names below signatures for clarity.
Attestation: A statement confirming the resolution was duly adopted at a properly constituted meeting. Often, the company secretary attests to this.

Example of a Board Resolution

[Company Name]

Resolution No. 2024-03-08-01

Date: March 8, 2024

Meeting: Board of Directors Meeting held on March 8, 2024, at [Location]

WHEREAS, the Board of Directors of [Company Name] has considered the need to expand its marketing efforts; and

WHEREAS, the Board has reviewed and approved a proposed marketing plan presented by [Name and Title];

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby approves the marketing plan presented by [Name and Title], authorizing the expenditure of up to $[Amount] for the implementation of this plan; and

BE IT FURTHER RESOLVED, that [Name and Title] is hereby authorized to execute all necessary contracts and agreements related to the implementation of this marketing plan.

[Name] [Name] [Title] [Title]

[Company Secretary Name] [Company Secretary Title]

Tips for Writing Effective Board Resolutions

Use Plain Language: Avoid legal jargon or overly technical language.
Be Specific: Clearly state the action being taken, avoiding ambiguity.
Maintain Consistency: Use a consistent format for all resolutions.
Proofread Carefully: Ensure there are no grammatical errors or typos.
Keep Records: Maintain a central repository for all board resolutions.
Seek Legal Advice: Consult with legal counsel if you have any doubts or questions.

Writing effective board resolutions is crucial for sound corporate governance and legal compliance. By following these guidelines, you can ensure your resolutions are clear, accurate, and legally sound. Remember, while this guide provides valuable information, seeking professional legal advice is always recommended, especially for complex situations.