What is a board resolution

What Is Board Resolution

A board resolution is a legal document that formalizes the decisions made by the board. As a rule, resolutions are written at the time new board members are accepted. Sometimes these documents serve as proof of action if the company has suddenly been dragged into litigation, and they are also requested by other institutions, as a record of the company’s business matters. Shareholders, too, can sometimes request resolutions from the board, since the board makes decisions on their behalf and they need to be aware of them. In this article, we will look at what is a board resolution, and how it is made.

What is a board resolution and what are the reasons for writing them

So, as mentioned above, resolutions are a legal document that is a formal way of confirming a particular board action. Resolutions are kept in the company archives for a long time, along with minutes of meetings. Regular writing of resolutions is an indicator of orderliness and quality management in the council. 

Anything can be a reason to write a resolution. Mostly, it is a confirmation of a decision they voted for and later implemented. Below we have listed a list of possible reasons for the council to write a resolution:

  • It is important to the board that every action they take be formally confirmed
  • Participants want a written record of the company’s shareholder decisions
  • The board wants to expand the company
  • The organization has decided to fire an old employee or hire a new employee
  • Acknowledgment of agreement between the company and shareholders to sell shares
  • The board wants to request intellectual property rights
  • When making a very serious decision that will noticeably affect the organization
  • The board of directors has decided to fire a board member
  • The board decided to reaffirm a new policy on options and stock
  • Resolution can help the company set new goals and branding
  • Resolution helps to learn about the availability of the kinds of resources they will need
  • The board of directors decided on an administrative issue that affects the association’s internal operations, such as dues and other operations

And this is just a small part of what could be.

How to Write a Board Resolution: Sample

Despite the seriousness of this document, its format and writing are very simple and short. The culture of the resolution also ranges from official and formal to plain, straightforward. The form of the resolution should follow the structure of the organization, the wording is very succinct, you simply describe the action that the board has agreed to. Be sure to specify the date of the resolution and indicate the parties to the resolution.

An example of a resolution might be the statement below:

We now agree to accept the statement below as though it had been taken at a regularly convened meeting of the Consolidated Aircraft Corporation’s board of directors. In accordance with the state laws and bylaws of this corporation, the board of directors unanimously resolves as follows:

The Chairman of the Board of Directors may act on behalf of the Board of Directors in entering into an agreement with the City of San Diego and may sign and execute the following duties concerning such agreement.

When the resolution is approved, it shall bear the date and the address of the place in which it was formally approved. Also, all board members, including the chairman, must sign it. Afterward, the secretary takes the document to the archives, but before doing so, sends out copies of the document to all parties for whom it is needed, as the law requires.