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Trustee Resolutions, Trustees

Does a resolution require a meeting?

The terms minutes and resolutions are used interchangeably in the context of trusts.  Minutes and resolutions are used to record trustee decisions.  Whether these terms are in fact interchangeable and if there might be implications arising from the use of one or the other is not clear.  The major texts consulted are silent on the subject.

My own views have been that minutes, which are commonly used in the context of companies and formal meetings generally provide a formal record of a meeting, who attended, what was decided, what documents were presented etc.  What they are not, without more is a record of a resolution.

A resolution by contrast, is a record of a decision that the trustees have made, whether or not the decsion was made at a meeting.

The difference may seem semantic.  However, it is actually quite important.  Support for my own views can be found in a recent STEP journal article titled “Trustee Minutes – should they take hours?” written by Ashley Fife who states that:

“The purpose of mintues is to document a meeting of the trustees and the decisions made by the trustees at the meeting.  The minutes themselves do not validate such a meeting or decisions.  In order for the decisions to be effective the formal requirements of the quorum and notice need to be satisfied … Trustees are generally also permitted to dcoument written decisions by was way of written resolutions.  This can be an efficient way of documenting decisions where it is considered that a meeting of the trustees is not required or where meetings cannot occur …”.

Why getting it right can be so important is that firstly, a meeting, if held, must be in accordance with the terms of the deed of trust.  If there are no rules regarding the conduct of meetings not much turns on that. However, where a meeting is not validly constituted, any minute recording the meeting could be similarly compromised (as could any record of a resolution).

By contrast, a resolution, if correctly recording a decision made by all the trustees will stand as simply a record of a decision.

As trustees are challenged more and more often, the need to demonstrate decision making is increasingly important and adherence to basic rules and principles will assist. 

What trustees need to take from this is that:

  • decisions and conduct of meetings are recorded in minutes
  • decisions made without a meeting necessarily being convened are recorded in resolutions.

If you are using a resolution precedent that says the trustees met, and that was not in fact the case, amend the precedent.  Accurate resolutions can be essential in demonstrating appropriate standards of trust management.  Where a resolution is compromised because of inaccuracy of error, the standing of the resolution and whether or not the trustees actually made a decision can be compromised.

References:

“Trustee minutes – should they take hours?” Ashley Fife, May 2011, Step Journal Issue 2, May 2011

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