Committee urges stronger record keeping in important institutions
3 May 2016
Rt Hon. Andrew Tyrie MP, Chairman of Treasury Committee, writes to Simon Osborne, CEO of the Institute of Chartered Secretaries and Administrators, to stress the need for board minutes to always record instances of substantive disagreement among directors, not just in cases when a director requests that his or her dissent is recorded.
- Letter from Rt Hon Andrew Tyrie MP to Simon Osborne, CEO of the Institute of Chartered Secretaries and Administrators, 25 April 2016
- Treasury Committee
Commenting on the correspondence, Mr Tyrie said:
"Responsibility for a company rests with its board. Clear and accurate board minutes are essential. In systemically important institutions these assurances are particularly important. When companies fail board minutes are ‘black boxes' from which information can be gleaned to help prevent a repetition of previous mistakes. Among other things, they should record areas of substantive disagreement among directors.
The current practice, which requires a director to ask that his or her dissent be noted before it is included in the minutes, is flawed. It sets too high a bar for the inclusion of what may be the most important element of a board discussion. It may also give a misleading representation of the tone of a meeting.
It is, in the first instance, ICSA's job to think this through properly and arrive at an appropriate improvement to current board practice. I hope that ICSA are getting on with it".
- Following the publication of the HBOS review in November 2015, the Chairman of the Treasury Committee wrote to ICSA on 9 December. The Chairman stressed the "importance of ensuring accurate minutes are taken at…Board meetings", noting that the Committee's specialist advisers had found that HBOS's board and committee meeting minutes "were frequently not sufficiently full to provide a definitive record of what happened". The letter also questioned what ICSA meant in its minute-taking guidance when it stated that properly constructed minutes "reflect director dissent where appropriate".
- Simon Osborne, the CEO of ICSA responded in a letter to the Chair of the Treasury Committee on 14 December. On recording dissent the letter stated:
"Most board decisions are taken by consensus. There is rarely a formal vote taken so dissent will usually be recorded only when a director asks specifically for his or her dissent to be noted. As I mentioned above, there will usually be an opportunity at the start of the succeeding meeting, when the minutes of the last meeting are presented for approval, for any director who wishes to do so to have their dissent or some qualification formally recorded. We are currently working on some updated guidance on minute taking, which we expect to publish in spring 2016. This will include reference to recording of directors' dissent".