Writing up a resolution for a board of directors plays a key role in making official the choices reached during board meetings. Resolutions prove vital to take actions such as giving the green light for bank accounts okaying mergers, or giving certain officers the power to sign. New stats show that 68% of boards rely on resolutions as their go-to way to make official decisions, which shows how much they matter in running a company. This guide takes you through each step of creating a board resolution, making sure it ticks all the boxes for legal and company rules.
A sample corporate resolution for signing authority can be a big help when you’re writing resolutions when you’re dealing with tricky issues that need just the right words and have to follow the law.
Getting to Grips with Why Board Resolutions Matter
A board resolution acts as an official record of choices made by the board of directors. It spells out the details of an action or decision, the people who have the power to carry it out, and the legal reasoning behind the decision. Resolutions matter because they offer clarity and responsibility making sure all board actions are documented and in line with what the organization wants to achieve. Before writing a resolution, it’s key to state its aim, whether that’s to give the green light to a strategic partnership, name officers, or approve money transfers.
Key Components of a Board Resolution
A well-crafted board resolution has these parts:
- Title and Introduction The heading should make the resolution’s purpose clear, like “Resolution to Give Bank Signing Power.” The opening sets the stage for the resolution, giving background and context. It might mention earlier talks or choices that led to this decision. It could also point to the part of the group’s rules or laws that apply.
- Resolution BodyThis part spells out the exact actions or choices getting the green light. The words should be simple and straight to the point, not leaving any wiggle room. It needs to say who can do what how far their power goes, and any rules they have to follow. For instance, if the decision is about who can sign stuff, it should point out which higher-ups can put their name on deals for the company and when they’re allowed to do it.
Steps to Draft a Resolution
To write a resolution, you need to take several steps to make sure it shows what the board wants and follows the law:
- Check the Bylaws: Before you write the resolution, look over the organization’s rules. Make sure your planned action fits with what the board can do and follows any specific steps they require.
- Write the Resolution: Use simple official words to spell out the decision. Don’t use fancy terms or complicated phrases that might confuse people. The resolution should be crystal clear.
- Look it Over and Say Yes: After you finish the first draft, board members should read it. If needed, a lawyer should check it too. To approve it, you need an official vote during a board meeting. Make sure to write this vote in the meeting notes.
- Distribute the Resolution: Once approved, share the resolution with all involved parties and store it in the organization’s files to refer to later.
Conclusion
A well-written board resolution plays a crucial role in keeping corporate governance transparent and accountable. When you need to draft a resolution to authorize money matters or give specific powers, using a sample corporate resolution for signing authority can help you create a document that meets legal requirements. Board members and secretaries who follow the steps in this guide can write resolutions that and show the board’s decisions.