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Banking failure: Chair writes to Simon Osborne on minute taking

7 October 2016

Following publication of the Institute of Chartered Secretaries and Administrator's (ICSA's) revised guidance note on minute taking, Rt Hon. Andrew Tyrie MP, Chairman of Treasury Committee, has written to Simon Osborne, CEO of the Institute of Chartered Secretaries and Administrators, to ask him to have another go.

Chair's comments

Commenting on the correspondence, Mr Tyrie said:

"It took seven years of investigation for taxpayers - who were forced to bail out RBS and Lloyds to the tune of £65bn – finally to get to the bottom of what went wrong. Among the many weaknesses recognised by the regulators and Parliament's specialist advisers was the manifest failure of boards to operate properly, to ventilate discussion and record disagreement within these systemically important institutions.

Clear and accurate board minutes are essential. When companies fail board minutes can and should be thought of as 'black boxes' from which information can be gleaned to help prevent a repetition of mistakes.

Among other things, the minutes should record areas of substantive disagreement among directors. ICSA's revised guidance on minute taking has been written as if the second worst banking failure in British history never happened.

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.

In the first instance, it should be ICSA's job to sort this out. So I've written again to Simon Osborne, suggesting that they think again on this point."

Further information

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