And . . . Yet Another Minute About Minutes

Over the years we have used this blog to highlight Delaware case law where the topic of corporate minutes has played a material role in the way the court has reviewed the actions of a board of directors.  Those posts can be found here under the tag “minutes.”

Recently, The Honorable Leo E. Strine, Jr. (Ret.), the former Chief Justice and Chancellor of Delaware, posted a short summary on the Harvard Law School Forum on Corporate Governance of a more comprehensive paper he has written on this topic titled: “Minutes are Worth the Minutes: Good Documentation Practices Improve Board Deliberations and Reduce Regulatory and Litigation Risk”  forthcoming in the Fordham Journal of Corporate and Financial Law.  

Spending some time reading Chief Justice Strine’s article is well-“Worth the Minutes” invested, as he has done a great job of surveying the case law and highlighting the methods and means for generating corporate minutes that will most likely withstand scrutiny and give confidence to the court in the governance actions taken at such meetings.

A Minute About Minutes

Drafting minutes of meetings—particularly for meetings of boards of directors or special committees of boards—is an art rather than a science, and while there are certainly many ways to accurately record the proceedings, understanding the ways minutes might be used later is very important.

In the world of Delaware corporate law, minutes of board meetings often play a pivotal role in shareholder litigation challenging the acts of the directors. Indeed, in a recent high-profile decision in which the Court of Chancery refused to enjoin the annual meeting for Sotheby’s in the face of a vigorous proxy fight, the Vice Chancellor’s opinion remarks upon the contents of board minutes on several occasions, and in a manner that provides some practical tips for consideration when drafting minutes. See, Third Point LLC v. Ruprecht, et al., C.A. Nos. 9469-VCP; 9497-VCP, Mem. Op. (Del. Ch. May 2, 2014).

Continue reading “A Minute About Minutes”

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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