When is it appropriate to use Unanimous Written Consent for board approvals? In most cases, corporate bodies such as shareholders and boards of directors act on resolutions at meetings. Information is prepared and distributed by the corporate secretary ahead of time and board members have time to review and discuss prior to voting at the meeting. However, business doesn’t always coincide with a board’s meeting schedule. There are times when approvals are needed, but an in-person meeting isn’t possible.
When approval is needed outside of board meetings, Unanimous Written Consent can be used. The corporate secretary creates an approval document and supplies sufficient information to allow directors to make an informed decision. If all directors agree, the approval is signed and added to the records book with meeting minutes.
How to Use Unanimous Written Consent
Traditionally, the written consent has been sent via mail or fax for each director to sign and return. In many cases, each individual director can sign and return their own signature page and the sum of those pages is considered valid as unanimous written consent.
With the evolution of technology, email has also become a tool for distributing information, but does a reply to an email create a legally binding signature? In many cases not. So companies have turned to e-signature solutions that allow a streamlined process of gathering signatures from the board of directors in a secure way.
Why Unanimous Written Consent Matters
As the economy and business continues to become more global by the minute, the use of technology becomes even more critical to success. The addition of technology by boards is no exception. Over the past fifteen years, board portals have become mainstream and best practice when communicating and housing crucial information to boards. They also allow busy directors a way to stay engaged and better informed than their paper or email using counterparts. Equally as important, they provide ONE place to manage board scheduling, meeting materials, reference documents such as policies, procedure, and by-laws and archived information which were formerly managed by multiple solutions.
After so much innovation has occurred which eliminates the need for disparate technologies (calendaring, secure documents, storage solutions), why should you keep approvals separate? The answer is you shouldn’t. If your company uses unanimous written consent or has a need for electronic signatures, it makes sense to choose a board portal that incorporates the tools to manage the approval process as well.
Directors are busy. The job of the organization is to provide them with the appropriate information that allows them to be engaged and informed so that they are able to provide valuable guidance. Instead of providing them with many tools (that require adoption and training), give them one central source for all of their board needs.
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