A board resolution is a formal document that records a decision made by an organization’s board of directors. It's essentially a written record of their vote on a specific matter.
What is different from just a board vote and a board resolution?
Key Differences:
A board vote is the act of expressing an opinion (yes, no, abstain) on a specific matter during a board meeting and is recorded in the meeting minutes. A board resolution is a more formal and official recording of a board vote.
Board resolutions are typically required for significant board decisions. Here are a few examples:
- Major transactions: Mergers, acquisitions, or the sale of substantial assets such as real estate.
- Legal assignments: Authorizing the retainage of new legal or financial providers.
- Appointing officers: Selecting or removing key executives like the CEO or CFO.
- Revisions to the Charter: Substantive revisions to the charter.
- Amending bylaws: Changing the organization’s governing rules.
- Authorizing legal action: Approving lawsuits or legal defenses.
- Opening bank accounts: Establishing new corporate bank accounts, including assigning signatories.
Key Points:
- Good governance: Resolutions promote transparency and accountability within the organization and with the public.
- Internal control: They help ensure that decisions are made in accordance with organizational policies and applicable laws.
Legally binding: Board resolutions often carry legal weight and may be used as evidence in court. For more information and guidance, refer to your organization’s legal counsel.
You can download an example of a board resolution below.
Disclaimer: This information is for general knowledge and guidance only. For specific legal advice, consult with your board’s qualified legal authority.
- Sample Resolution .pdf100 KB
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