A closed-session board meeting (also known as an executive session) is a private board meeting. Unlike an open meeting, it’s not open to the public, stakeholders, or shareholders. Closed-session board meetings are typically organized to discuss sensitive matters and make decisions that require privacy. Here are examples of topics discussed during private board meetings:
- Sensitive strategic matters. Some strategic choices, such as approval of mergers and acquisitions, are often discussed behind closed doors for the best outcomes.
- Legal issues. Topics involving regulatory compliance, pending litigation, or actual criminal misconduct, require privacy to protect the organization’s legal position.
- Staff issues. Topics related to executive compensation packages, hiring processes, performance reviews of board members, or disciplinary actions often require confidentiality for privacy protection and ethical compliance.
- Private contracts and negotiations. Contractual discussions followed by non-disclosure agreements, such as partnership opportunities, must be kept private for legal compliance.
Key elements of closed session board meeting minutes
- Heading. Includes company name, meeting title, date, time, and location.
- Attendance. Lists the board members invited, present, and absent.
- Reason for a closed session. Outlines the specific purpose of the closed meeting (for example, to approve M&A valuation). Usually, the board determines the scope of sensitive topics with the help of legal counsel.
- Agenda items. Lists meeting topics with presenters and time stamps.
- Resolutions and board vote. Records motions and voting outcomes.
- Action items. Lists follow-up actions, responsible members, deadlines, and responsibilities.
- Adjournment. Records the meeting’s conclusion time.
Download our meeting minute template to record closed-session meeting decisions efficiently and use an actionable framework for meeting follow-ups.
Formatting tips for closed session minutes
How to take minutes for a nonprofit board meeting or a corporate board meeting if it’s not an open session? Here are a few helpful recommendations:
Maintain an objective tone
Closed board meeting minutes should be written in a neutral tone. The language of closed board meeting minutes should focus on the outcomes of decisions without excessive details of discussions or addressed concerns.
Here is an example of neutral, factual language: “The board of ABC Corporation discussed the valuation of the potential merger with XYZ Corporation. Upon reviewing the financial analysis of the proposed merger, the board approved the proceeding with negotiation based on the valuation range provided.”
Omit sensitive details
General closed-session board meeting rules require that minutes shouldn’t contain details that might compromise the organization. It might be practical to avoid sensitive information, including, but not limited to the following:
- Sensitive negotiations, including details of mergers and acquisitions, legal opinions on the validity of contracts, contractual terms, and investigative proceedings.
- Personnel matters, for example, the strengths and weaknesses of an individual board member or public officer, history of disciplinary procedures, and compensation details.
- Detailed descriptions of closed-session discussions between board members.
- Financial performance discussions, including the company’s budget, asset allocation considerations, stock options, and other incentives for employees and executives.
“While accuracy [of meeting minutes] is paramount, overly detailed accounts of every comment or disagreement can leave the organization vulnerable to unnecessary risk.” Levin Ginsburg, Chicago law firm
Use consistent headings and subheadings
Using structured headings and subheadings is highly recommended when taking minutes for a board meeting. These formatting elements typically have larger text than normal body text and are used to separate the document into sections.
Heading and subheadings should correspond to the key elements of meeting minutes, such as ‘Attendance,’ ‘Agenda items,’ or ‘Resolutions and voting.’ They are typically organized hierarchically:
- H1 (heading 1) is used for the main title.
- H2 (heading 2) breaks down content into sections.
- H3 (heading 3) marks subsections of H2 headings.
- H4 (heading 4) is used for even more specific subsections of H3 headings.
Store minutes of a closed board meeting separately and securely
The breach of sensitive corporate or nonprofit board meeting minutes may significantly harm the organization’s legal standing, reputation, and financial stability. Storing closed-session meeting minutes securely and separately from the rest of the board documents is essential for the organization’s risk protection.
The critical importance of this practice can’t be stressed enough amidst the rapid evolution of digital threats. IBM reports the average data breach cost has reached $4.88 million, with a 19.5% increase from 2023 to 2024 in organizations paying over $100,000 in regulatory fines.
Using a board portal with robust access management capabilities can be an effective solution to store closed-session minutes securely. Ideals Board offers the following features for ensuring the confidentiality and integrity of closed-session meeting minutes:
Folder access management
Ideals Board’s customers can precisely manage access to board portal folders. This enables administrators and secretaries to restrict meeting minutes access to authorized board and committee members, effectively separating this sensitive content from the rest of the board portal.
Agenda visibility settings
Our customers can customize the visibility of agenda sections for particular meeting participants. This allows administrators to tailor specific parts of meeting agendas, such as meeting minutes, to user roles and permissions.
Board book download visibility settings
Downloaded board books retain agenda visibility settings, enhancing the privacy and security of meeting minutes. This ensures that closed-session meeting minutes remain restricted to authorized board members at all stages, from access to distribution.
Best practices for documenting closed sessions
Here are several helpful practices for documenting closed meetings and keeping closed meeting minutes:
Restrict access to meeting minutes
Access restrictions are highly effective for protecting information assets and adhering to digital security standards, such as the ISO/IEC 27001. An ISO 27001-compliant board portal can be a practical tool to achieve these safeguards while adhering to digital security standards. Ideals Board is ISO 27001-certified and meets the following user access management (UAM) requirements:
- Determining who should access information assets.
- Establishing user roles and responsibilities.
- Managing user accounts.
- Revoking access to information assets.
- Monitoring user access.
Further reading: Are board meeting minutes public?
Regularly update meeting minute templates for compliance
Using meeting minute templates helps administrators and minute-takers standardize record-keeping. While templates are convenient, it’s crucial to periodically ensure they meet evolving corporate governance standards and privacy laws.
It’s generally advised that meeting minutes include the time and location of the meeting, the presence of a quorum, and the names of the chairperson and the board secretary. The meeting minutes should state whether the meeting was arranged according to the organization’s bylaws and whether participants were given proper notice.
“There is no federal standard for corporate minutes, except for the Model Business Corporation Act (Model Act) stating the company shall maintain minutes of all meetings and actions of shareholders, directors, and board committees…” Bloomberg Law
Prepare and approve minutes promptly
It’s advisable to prepare meeting minutes within the first 24-48 hours after the meeting. This ensures prompt follow-up actions, specifically when follow-up tasks have time limitations.
Prompt distribution of meeting minutes can also reduce feedback time and speed up approval. Meeting minutes can be approved electronically through embedded electronic signatures.
Tools and templates for board meeting minutes
Managing meeting minutes using digital tools, such as board portals, has become a standard practice for corporate and nonprofit boards. Ideals Board stands out as a trusted solution, chosen by over a million users across 175,000 organizations worldwide, for its advanced minute-taking features:
- Digital minute taker. Effortlessly create meeting minutes in digital templates with time-tracking tools and never miss on details with an auto-save feature.
- Electronic signature. Streamline approvals with built-in electronic signatures that can be saved and reused for future meetings.
- Incorporated tools. Save time by directly transferring voting results from your digital agenda to meeting minutes, eliminating the need for manual counting or transcription.
Key takeaways
- Key elements of closed session meeting minutes are heading, attendance, reasons for a closed session, agenda times, voting results, action items, and adjournment.
- It’s advisable to maintain an objective tone, omit sensitive details, and use consistent headings while documenting meeting minutes.
- Closed-session meeting minutes should be stored securely and separately from the rest of the board materials.
- Use Ideals Board’s custom meeting minute template to enhance the consistency and clarity of closed board meetings.