Board Meeting Mistakes to Avoid: Part 4 of Delaware Board Meeting Series
Over the course of this blog series, we’ve explored the essential elements of calling and holding board meetings for Delaware companies—from understanding what they are and when they’re required, to creating effective agendas and maintaining proper records. In Part 1, we introduced the purpose and structure of board meetings. Part 2 covered minutes and documentation, while Part 3 focused on practical tips for preparation and participation.
Now, in Part 4, we’re rounding out the series by addressing common mistakes business owners and directors make during the board meeting process—and how to avoid them. These oversights can lead to compliance issues, confusion, or even legal exposure. Fortunately, with a little foresight, most of them are easy to prevent.
Board meetings are a fundamental part of corporate governance, offering a platform for strategic decisions, oversight, and accountability. They are the primary forum in which directors exercise their fiduciary powers. However, even the most well-intentioned business owners can encounter pitfalls in the planning, execution, or documentation of these meetings. Mistakes in calling, holding, and documenting board meetings can lead to later liability.
In this final installment of our series, we’ll highlight some of the most common mistakes we’ve seen—and how to avoid them to ensure your company remains in good standing and maintains a strong, documented record of board analysis, considerations, and decisions.
1. Failing to Give Proper Notice
One of the most frequent missteps is not giving directors adequate notice of an upcoming board meeting. Bylaws often stipulate how much notice is required and the method of delivery (email, mail, phone, etc.). Failing to follow these requirements can make decisions during the meeting invalid or open to challenge. Directors can expressly waive the notice requirements and appear at meetings despite notice that violates otherwise required time frames or means of notification. Any such waiver should be documented on a director-by-director basis in the board meetings. Note, however, directors can also attend board meetings without being deemed to count toward a quorum for decision-making (discussed below) to object to a lack of proper notice. Providing insufficient notice or selective notice to exclude certain members of a board from reaching a given result is imprudent and generally a violation of the board’s fiduciary duty. Such attempts have led to innumerable decisions finding directors violated their duties in manipulating notice of board meetings to draw specific directors and reach a decision desired by a plurality or even a majority of the board while avoiding addressing dissent.
How to avoid it: Review your bylaws and adopt a consistent method for issuing meeting notices that complies with the bylaws’ requirements, with a written record of when and how they were sent.
2. Not Keeping Accurate or Complete Minutes
Meeting minutes serve as the official record of decisions made by the board and the process by which those decisions were reached. Omitting key discussions, motions, or vote results can create ambiguity or expose the company to legal risk in the future. Further, the minutes not only serve as a corporate record, they document the directors’ thorough and reasoned consideration of issues and fulfillment of their duty of care. There is a balance to be reached, however, between too much detail and too little. The minutes should include the nature of debate, and the materials evaluated to evidence the directors’ discussion and consideration of issues as part of the duty of care but need not be exhaustive. Directors should approve the last meetings’ minutes at the beginning of the next meeting, or by email after a given meeting.
How to avoid it: Assign a dedicated individual to record minutes at each meeting and use a standardized format. Include essential details such as attendees, resolutions proposed, the outcome of votes, and any dissenting opinions.
3. Overlooking Quorum Requirements
Conducting official business without meeting quorum requirements is another common error. If the necessary number of directors is not present, any actions taken may not be legally binding.
How to avoid it: Check your bylaws or Certificate of Incorporation to confirm quorum requirements and always verify attendance before proceeding with official business.
4. Mixing Operational and Strategic Matters
Board meetings are not meant to address daily operations in detail. Directors should focus on broader governance matters—long-term strategy, risk management, major expenditures—not micromanagement.
How to avoid it: Create an agenda that clearly delineates strategic topics and circulate it in advance to keep the meeting focused and productive.
5. Not Formalizing Decisions in Writing
Even if there is a consensus during the meeting, failing to formally adopt a resolution or failing to document it in writing can lead to confusion or disputes later on.
How to avoid it: Ensure that any action approved by the board is reflected in a written resolution, included in the minutes, and stored in your corporate records.
Final Thoughts
Conducting effective board meetings is more than a legal requirement, it’s an opportunity to steer your company’s growth and accountability. By avoiding these common mistakes and adhering to best practices, you’ll help safeguard your corporation’s legal standing and build a stronger foundation for future success.
If you have questions about forming or maintaining a Delaware company, Harvard Business Services is here to help. Our team is available to assist with company formations in any state, Registered Agent services, and annual franchise tax filings.
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