Table of Contents
Demystifying the Written Action of the Board of Governors
In the intricate landscape of corporate governance, decisions made by the governing body of an organization play a pivotal role in shaping its direction and strategy. One important tool in this realm is the Written Action of the Board of Governors, often referred to as a “Written Consent” or “Unanimous Written Consent.” This mechanism enables efficient decision-making without the need for formal meetings, offering flexibility and responsiveness in today’s fast-paced business environment.
Defining the Written Action of the Board of Governors
The Written Action of the Board of Governors is a formal document that records decisions and approvals made by the governing body of an organization without the need for a physical meeting. It is a legally recognized instrument that serves as an alternative to convening a formal board meeting when urgent matters arise or when the physical presence of all members is not feasible due to geographical constraints, time limitations, or other circumstances.
Unlike traditional board meetings where members gather to discuss and vote on matters, a Written Action allows board members to express their consent or dissent in writing. When all members of the board provide their unanimous approval or consent to a proposed action, the resolution is considered adopted, binding, and effective as if it were made during a formal meeting.
Key Benefits of the Written Action
- Time Efficiency: Written Actions eliminate the need to schedule and convene physical meetings, thereby saving valuable time for both board members and executives. Decisions can be made promptly, enhancing the organization’s ability to respond to time-sensitive issues.
- Flexibility: The flexibility offered by Written Actions is particularly valuable when board members are scattered across different locations or have busy schedules that make it challenging to coordinate in-person meetings.
- Convenience: Board members can individually review and contemplate proposed actions at their own pace, leading to more thoughtful and well-informed decisions.
- Privacy and Confidentiality: Written Actions provide a level of privacy and confidentiality that might not be achievable during live discussions. Sensitive matters can be addressed without the risk of leaks or inadvertent disclosures.
- Accessibility: Digital communication tools and secure platforms enable remote collaboration and facilitate the process of collecting and recording board members’ approvals.
Procedure for Implementing a Written Action
- Initiation: A proposed action is presented to all board members, typically accompanied by relevant documentation and context. This can be done through secure communication channels or board management software.
- Review and Consent: Each board member reviews the proposal and expresses their consent or dissent in writing. To achieve a successful Written Action, unanimous approval is usually required.
- Documentation: Once all members have provided their written consent, the board secretary or a designated individual compiles the approvals, along with the details of the proposed action, into a formal Written Action document.
- Distribution and Recording: The finalized Written Action document is distributed to all board members for their records. It is also recorded in the organization’s official minutes or records as evidence of the board’s decision-making process.
In the modern landscape of corporate governance, where agility and responsiveness are paramount, the Written Action of the Board of Governors emerges as a valuable tool. It streamlines decision-making processes, eliminates logistical challenges, and ensures that the collective wisdom of board members can be harnessed efficiently. As organizations continue to navigate the complexities of the business world, embracing this innovative approach to governance can contribute to a more dynamic and effective decision-making framework.
What is a Written Action of the Board of Governors?
In an LLC, the board that oversees the company is called a board of governors. In the corporation context, the board is called the board of directors. Well, similarly, in an LLC, the board oversees the company, but in an LLC, it is called the board of governors.
So written action of the board of governors is simply when the governors decide rather than meeting to pass a resolution. They are simply going to sign off on a resolution in writing in a written action. Unless prohibited by the articles, bylaws, or state corporate statutes, written actions are generally enforceable. So, in other words, often with current bylaws or bylaws that are used in most companies these days, there is nothing improper about the board using a written action to make a decision in the company, rather than actually meeting, discussing, and passing a resolution.
All right. If you find these videos helpful, and you are interested in little short videos, little snippets, or some of the best excerpts from the videos that we have produced, you can find those by searching for Aaron Hall, Attorney, on TikTok, Instagram, and various other social media platforms. So feel free to follow us there, especially if you are interested in that short-form content, which is some of the best little snippets of legal questions presented by business owners.
I am Aaron Hall, an attorney for business owners and entrepreneurs. If you would like to get more videos like this, feel free to follow this channel by subscribing. And I encourage everybody to subscribe at aaronhall.com/free. That is where you can get some exclusive videos, helping business owners avoid common and expensive legal problems and help grow your company so you achieve success in your company and, hopefully, as well in your life. Thanks for joining me here today.