Board Decision Making - Explained
How do Boards of Directors Make Decisions?
Written by Jason Gordon
Updated at April 5th, 2023
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How do boards make decisions?
The formal process for making decisions is carried out during a board meeting. First, a director makes a motion to approve a specific action or rule. The directors take a formal vote on the action.
The votes necessary to carry out the action (majority or super majority) are determined by the bylaws. The corporate secretary records the votes and action taken by the board.
Later, the board formally approves all actions by approving the records of the meeting. An alternative method of taking board (or shareholder) action is through consents.
What are Board Consents?
Consents are formal, written votes by the members of the board to approve an action. Many corporate decisions made by consent must receive unanimous support.
Back To: BUSINESS ENTITIES, CORPORATE GOVERNANCE, & OWNERSHIP
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