Proper board meeting minute taking has recently increased in importance as a result of a number of court decisions. Bankers and other businessmen doing business in the corporate form should carefully consider the impact of cases such as In re Walt Disney Company Litigation (Del. Ch. 2004). 

In many states, minutes are considered to be prima facie (i.e., presumptive) evidence of what actions an entity actually took. Some courts have also taken the position that other evidence (such as witnesses testifying that serious debate did actually occur in a meeting, even when the minutes don’t record such debate) won’t be allowed unless minutes are clearly incomplete or ambiguous.

In re Walt Disney Company Litigation (Del. Ch. 2004) is a case in point and is particularly instructive with respect to the appropriate level of detail in board minutes. The Disney plaintiffs charged that the board of directors of Disney violated their duty of good faith when considering the CEO’s hiring of a new president. When Disney’s board met to discuss the hiring, the minutes did not review or approve: (i) any presentations or reports regarding the terms of the draft hiring agreement, (ii) any questions raised by any board members, and (iii) the employment agreement …