Corporate Recordkeeping Practices Simplified
Accurate corporate recordkeeping practices can preserve a company’s history of business and financial decisions. Unfortunately, creating and maintaining accurate business records is often overlooked by companies of all sizes. It’s more than just a corporate formality; recordkeeping is a critical element of directors and officers liability loss control and required per the Canada Business Corporations Act (R.S.C., 1985, c. C-44)
Corporate Recordkeeping Practices and Liabilities
Business decisions that require board member or shareholder participation necessitate the creation of board meeting minutes to capture the details and context of decisions made. Meeting minutes serve as an important area of directors and officers liability loss control. If any business decision is questioned by shareholders, auditors, donors or regulatory agencies later on, directors and officers can bolster their defense with accurate corporate recordkeeping practices, detailed minutes that can serve as the chief piece of evidence for their side of the case.
Corporate Recordkeeping Practices “The Details”
Directors and officers should expect that board meeting minutes will be subpoenaed as evidence for a potential lawsuit; minutes should be prepared with diligence and detail. The minutes should be accurate and should include:
- A list of the attendees of the meeting and who were absent
- A detailed account of what occurred at the meeting
- A list of voting results, including the names of those who voted in favour and those who dissented
- Copies of any supporting documents distributed at the meeting and a reference to those documents
Corporate Recordkeeping Practices as a Defence
In the event of a lawsuit, directors and officers cannot claim ignorance or absence when decisions were made that resulted in corporate wrongdoing. Directors and officers who are unable to attend a board meeting must review the meeting minutes.
An ALIGNED Advocate can provide expert guidance about corporate record keeping, insurance and risk management best practices for your organization. Talk to one of our advocates today about how we can help you secure the best products, services and insurance solutions for your business.
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