Efficiently managing corporate resolutions is crucial for the smooth operation of any business entity. Like your articles of incorporation, a corporate resolution is a pivotal document for ensuring organizational transparency, accountability, and compliance.
If other key operational documents are well-drafted, such as the articles of association vs. memorandum of association, then the corporate resolutions process should flow smoothly.
Board meeting management software streamlines the process even further. Through features like board assessments, video conferencing integrations, agenda builder, D&O questionnaires, and meeting analytics, board meeting software enables better collaboration between stakeholders with different bottom lines.
What is a Corporate Resolution?
A corporate resolution, board resolution, or board of directors’ resolution is a formal document recording decisions made by a company’s board of directors during meetings.
To ensure the effectiveness and legality of these resolutions, companies rely on board of directors’ resolution templates, which are standardized formats for documenting decisions made by the board of directors.
Why are Corporate Resolutions Important?
One significant element that makes corporate resolutions is their role in formalizing board voting procedures. Corporate resolutions are important within an organization because they:
- Record key decisions: Corporate resolutions document significant decisions made by the board or shareholders, ranging from strategic plans and financial transactions to corporate structure or leadership changes.
- Establish accountability: By detailing who made the decision, when, and under what circumstances, resolutions establish accountability within the organization.
- Ensure legal compliance: Resolutions help ensure the company’s actions meet its articles of association, bylaws, and applicable laws and regulations.
- Provide transparency: Corporate resolutions offer a transparent view of decision-making, fostering trust and confidence in the company’s operations.
- Facilitate communication: Resolutions communicate decisions to all relevant parties within the organization, ensuring everyone is on the same page regarding critical matters.
Through corporate resolutions, board decisions become legally binding commitments.
What are the Most Important Things to Know When Building a Resolution?
When creating a corporate resolution, board members must observe certain key elements and practices to ensure its effectiveness and validity:
- Clarity and specificity: Resolutions should be clear, specific, and unambiguous. Ambiguity can lead to confusion and potential disputes.
- Proper authorization: Ensure the individuals making the decision have the authority to do so under the company’s governing documents (articles of association and bylaws) and other relevant laws.
- Meeting details: Include details about the meeting where the resolution was passed, such as the date, time, location, and attendees.
- Resolution numbering: Assign a unique identification number or reference to each resolution for easy tracking and retrieval.
- Signatures: Obtain signatures of authorized individuals, such as the board chair and secretary, to validate the resolution.
Adhering to these best practices ensures board members coordinate on corporate resolutions, fostering good corporate governance and compliance with legal and regulatory requirements.
Corporate Resolution Template
Creating a well-structured corporate resolution template is essential for documenting important decisions by a company’s board of directors or shareholders. Here’s a breakdown of the sections in a corporate resolution template:
The title of a corporate resolution should be clear, specific, and descriptive, allowing anyone reading the resolution to understand its focus.
The date specifies when the resolution is being drafted or considered. It’s a critical reference point for tracking the timing of the decision.
The preamble is the introductory section of a corporate resolution. It sets the stage for the resolution by providing context and background information.
This section often begins with phrases like “Whereas” and is a series of statements that outline the circumstances, considerations, and rationale behind the resolution.
3. Whereas Clauses
The “Whereas Clauses” section elaborates on the reasons and considerations for the resolution. Each “Whereas” statement provides background information and context.
For example: “Whereas, it is in the company’s best interest to [State the reason for the resolution].” or “Whereas, the board recognizes [specify relevant facts or concerns].”
4. Resolved Clauses
In this section, you provide a detailed state of the decisions or actions being taken. Each resolution should be clear, specific, and actionable. For example, “Be it resolved, that the company shall [specify the action to be taken, like, ‘enter into a merger agreement with XYZ Corp’].”
In the “Signatures” section, authorized individuals sign the resolution to validate it. Include spaces for the signatures of key personnel, such as the board chair or secretary of the board.
Depending on the company’s bylaws or articles of association, there may be other specific individuals, such as the CEO or CFO, who must sign resolutions for certain types of decisions or actions.
6. Approval or Adoption
This section includes a statement confirming the resolution has been adopted or approved. Specify the governing body, like the board of directors or shareholders, and provide the date on which the board of directors made the decision.
Corporate Resolution Examples
Here is a hypothetical example of a corporate resolution for a major movie production company looking to build a theme park for its fans.
Corporate Resolution: Establishment of a Movie Production Company Theme Park
Title: Establishment of Movie Production Company Theme Park
Date: [Date of Meeting]
Whereas the board of directors of [Movie Production Company Name] recognizes the strategic opportunity and immense fan engagement potential in building a theme park dedicated to our iconic movie franchises;
Now, therefore, be it resolved by the board of directors of [Movie Production Company Name] as follows:
- Authorization of Funds:
Be it resolved that the board authorizes the allocation of up to [Specify Amount] from the company’s funds for establishing and developing the movie production company theme park.
- Real Estate Acquisition:
Be it further resolved that the board approves the purchase of [Specify Address or Description] as the site for the theme park, and authorizes the negotiation and execution of all necessary documents related to the acquisition.
- Design and Building Approvals:
Be it further resolved that the board designates [Name of Responsible Executive/Committee] to oversee the design and construction process of the theme park. This individual/committee is authorized to approve design blueprints and construction plans subject to budgetary constraints and compliance with relevant regulations.
- Site Selection:
Be it further resolved that the board empowers [Name of Responsible Executive/Committee] to evaluate and select the specific location within the acquired real estate for building the theme park, considering factors such as accessibility, zoning regulations, and visitor experience.
This resolution, having been presented and discussed during the meeting of the board of directors of [Movie Production Company Name], held on [Meeting Date], was adopted as follows:
- Chairperson of the Board: [Signature] Date: [Date]
- Secretary of the Board: [Signature] Date: [Date]
- Additional Authorized Officer/Director: [Signature] Date: [Date]
Approval or Adoption:
This resolution was adopted by the board of directors of [Movie Production Company Name] on [Date of Adoption/Approval].
Getting Started With OnBoard
Effective board meeting management is crucial for organizations to make informed decisions, ensure compliance, and drive strategic initiatives. Board meeting management software like OnBoard streamlines these processes, making them more organized, transparent, and productive.
The software can hold and participate in virtual board meetings using remote meeting capabilities. It also includes document management, compliance and audit trail, and collaboration tools.
Enhance collaboration between board members and drive more productive and successful meetings with this free board meeting minutes template.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
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