It is common for people in a company, incorporated Society or trust
to want to take a “common sense” approach to decision making
where legal processes require something more formal that may
seem unnecessary. Sometimes the reasons for cumbersome
processes are not clear. Surely they do not need to be followed all
of the time? Well, yes they do.
The law is not forgiving when procedural rules are flouted
especially by officers who have a clear duty to act in the best
interests of the organisation. The Courts are very clear that a
critical element of good governance and management is the proper
observance of the law and constitutional documents no matter how
inconvenient that might be.
If the rules in a constitution are not working because they need
updating or were inadequate in the first place, then it is better to
address that through a formal change than just carry on as if they
will be changed later.
If decisions are not made and documented properly, this can cause,
or increase internal dispute within the organisation, or it can leave
the organisation, and its directors vulnerable in the event of an
external challenge, such as from a creditor. If directors’ duties have
been breached through taking shortcuts, then this can be very
expensive for the individuals involved. Sometimes, a contract or
arrangement is simply not legally effective if it has not been
agreed to properly. That might leave directors personally
responsible when they did not mean to be.
The “never mind we are all good friends here” management
approach may sometimes seem to work for a while. The fact is that
when there is a disagreement the first thing that people do is to
check the rules. If the rules have not been properly followed, then
officers become vulnerable to criticism and liability.
Our COMPANY AGENDA AND MINUTES PACK is a set of minutes,
agendas and written resolution templates designed to help record
important company decisions in a way that demonstrates
compliance with the Companies Act and most common
constitutional documents. The User Guide explains when the
various templates are to be used and the different majorities that
can be required to make different decisions. The COMPANY
AGENDA AND MINUTES PACK is an essential support tool for
running your company in a safe and compliant manner. ALL
