Why is it necessary to confirm minutes of the Board meeting?
The Supreme Court verdict in Kerala State Electricity Board V/s Hindustan Construction Co. Limited [2009] 91 SCL 183 (SC) seems to read out of context. In that case, the directors had resolved on few things in a particular meeting and in the next meeting they had 'not confirmed' the minutes of the previous meeting and therefore contending that the resolutions of the first meeting are not to be acted upon. In that context, the Supreme Court has stated that, “Confirmation of minutes of Board meeting or any committee meeting does not require confirmation in subsequent meeting. Non confirmation of minutes does not have any effect on the decision taken at the earlier meeting. When minutes of a meeting are placed before the next meeting the only thing that can be done is to see whether the decision taken at the earlier meeting has been properly recorded or not. Once a decision is duly taken it can only be changed by a substantive resolution properly adopted for such change”.
In my view, reading and confirmation of minutes is an absolutely essential item. Why? Generally, after the Board meeting, the Company Secretary or such officer present in the meeting drafts the minutes and sends it to the Chairman for vetting. After finalising, the same is circulated to the other directors. Assume a situation where, let us say 5 directors attended a meeting and if on a particular item passed with requisite majority, one or two directors had dissented. Let us say the fact that such director(s) had dissented is not recorded in the minutes, if we have an item on “confirmation of minutes” in the next meeting, it gives an opportunity for the dissenting directors to request an alteration and record the same. This can have far reaching implications.
Secondly – one practical reason, I have seen circumstances where certain item of agenda is not completely resolved for want of some inputs or actions to be taken and deferred for the next meeting. In such cases also, reading and confirmation of minutes acts as a backgrounder for such items. Of course in this case, one may counter argue that, we can also provide a fresh item as ‘matters arising out of previous meeting’ & provide related background and I agree that this is also workable. But certainly, omissions can be avoided if one reads and confirms the minutes of the previous Board meeting
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