What is a Meeting Approval?
Approvals are the instances when a board of directors
must approve a material action prior to its implementation. Formal board approval can occur during the meeting of the board of directors, especially when the approval will demand discussion amongst the board. However for routine matters, boards often give approval through unanimous written consent.
The instances when a board must make an approval are mandated by a variety of sources, such as: state corporate law, an organizations bylaws
and charter, and investor rights agreements.
Industry Best Practice
The follow actions will almost always require prior board approval before they may be implemented.
- An amendment to the bylaws or the articles of incorporation
- Issuance and distribution of stocks, options, or warrants
- Loan transactions
- Leasing transactions
- The adoption of the annual budget
- The hiring or removal of senior management
- Benefits; health insurance, 401(k)s, profit-sharing plans, etc.
- The dissolution of the company
- The sale or distribution of a substantial volume of assets
How Agendas Work in a Board Portal
Within a board portal
, approvals can be performed on specific agenda items and fosters discussions throughout the process. For instance, a loan committee attaches a proposed loan to the agenda with supporting documents; background of the loan, the terms, previous loans. Before the meeting, members may inspect the supporting documents and begin a discussion on the merits. During the meeting, members can simply tap an approval icon on agenda item for the loan and have the full context of the pending decision at their fingertips, culminating in their vote.
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