When a board decision is challenged, whether by shareholders, regulators, or in court, the first thing anyone asks for is the minutes. Good minutes do not just record what was decided. They tell the story of the decision: what information was considered, which risks were debated, how conflicts were handled, and why the outcome was in the company’s best interests.
Why minutes matter
Under the Companies (Jersey) Law 1991, directors must act honestly, in good faith, and with reasonable care. Minutes are your evidence that these duties were met.
In disputes or insolvency scenarios, well-documented reasoning can protect directors from personal liability. I have seen cases turn on whether the board could demonstrate it had properly considered the risks before approving a transaction. Where the minutes are thin, directors find themselves on the back foot. Where the minutes are thorough, challenges often fall away.
Beyond the defensive value, minutes create a reliable record for future boards, auditors and investors. They provide operational clarity that pays dividends long after the meeting has ended.
What good looks like
Good minutes capture the journey, not just the destination. They should show what information was considered (financial models, legal memos, market data), what risks were debated (downside scenarios, alternative strategies), how conflicts were handled (disclosures under Article 75, abstentions, independent advice), and why the decision was in the company’s interests, linking back to corporate benefit and solvency.
Where possible, pair minutes with supporting packs. Attach financial forecasts and sensitivity analysis, legal advice summaries for complex transactions, and market data or valuation reports. This demonstrates diligence and informed decision-making in a way that minutes alone cannot.
For high-risk decisions, such as those taken near insolvency or involving major acquisitions, consider adding a risk appendix. Summarise the alternatives considered and why they were rejected. Note any stress tests and mitigation plans. Record external advice obtained. This level of detail may feel excessive at the time, but it is invaluable if the decision is later scrutinised.
Practical structure
A well-structured minute should cover the meeting details (date, time, attendees, quorum), a clear description of the agenda item, background summarising the key facts and documents reviewed, and a discussion summary covering risks identified, questions raised, and conflicts disclosed and managed.
The decision itself should include the rationale explaining why the board concluded this was in the company’s best interests, together with any conditions or follow-up actions. List supporting documents as attachments, and include a risk appendix where appropriate.
Common pitfalls
Minutes that simply state “Resolved to approve” are not enough. Courts want to see why the decision was made, not merely that it was made.
Failure to record conflict disclosures or abstentions can invalidate the protections directors thought they had. For distributions or buybacks, minutes should include solvency statements and the assumptions underpinning them.
These are not technical formalities. They are the difference between a defensible decision and an exposed board.
Carl Parslow is a Partner at Parslows LLP and heads the Business Law department, with more than 30 years’ experience.