Recordal

In the complex and highly regulated landscape of UK corporate governance, precision in language and process is paramount. While many terms are widely understood, "recordal" holds a specific and critical meaning. At its core, recordal is the formal process of creating a permanent, official, and verifiable account of a company's decisions, proceedings, and key events. It is the deliberate act of transferring discussions and resolutions from transient conversation into the enduring corporate memory of the organisation.

This is not merely about note-taking; it is a fundamental pillar of good governance. A proper recordal serves as legal evidence, demonstrates accountability, and provides a clear audit trail for directors, shareholders, auditors, and regulators. For any UK-based organisation, from a start-up to a FTSE 100 company, mastering the art and science of recordal is not an administrative burden, but a strategic necessity.

This glossary entry will provide a comprehensive exploration of recordal within the UK context, covering its legal basis, practical application, best practices, and its evolution in the digital age with tools like board management software.

The Legal Foundation of Recordal in the United Kingdom

The requirement for formal recordal is not just a recommendation; it is enshrined in UK law, primarily within the Companies Act 2006. This legislation sets out specific obligations for companies regarding the creation and maintenance of records.

The Companies Act 2006: Key Provisions

The Act mandates the recording of various corporate activities, forming the legal bedrock of the recordal process.

  • Section 248: Minutes of Directors' Meetings: This section is central to the concept of recordal. It states that every company must cause minutes of all proceedings at meetings of its directors to be recorded. This is not optional. The language "must cause... to be recorded" places a clear duty on the company and, by extension, its directors and company secretary. These minutes, when signed by the chairman of that meeting or the next, are considered evidence of the proceedings.

  • Section 355: Records of Resolutions and Meetings of Members: This provision extends the duty of recordal to shareholders. Companies are required to keep records of all resolutions passed by members (other than at a general meeting) and minutes of all proceedings of general meetings. This ensures that the decisions made by the ultimate owners of the company are formally documented.

  • Written Resolutions: The Companies Act 2006 allows for private companies to pass shareholder resolutions in writing, avoiding the need for a physical meeting. The recordal of these written resolutions is equally important and subject to statutory requirements for documentation and circulation.

Failure to comply with these statutory duties can result in fines for the company and for every officer in default. Beyond financial penalties, a failure in recordal can render decisions invalid, expose directors to liability, and severely damage the company's reputation.

The UK Corporate Governance Code

For companies listed on the London Stock Exchange, the UK Corporate Governance Code provides a framework of best practice that, while not law in itself, operates on a "comply or explain" basis. The Code implicitly demands robust recordal. Principles of accountability, transparency, and risk management, which are woven throughout the Code, are impossible to demonstrate without a clear, accurate, and contemporaneous record of the board's deliberations and decisions. For instance, demonstrating that the board has properly assessed risk or managed conflicts of interest relies entirely on the quality of the meeting minutes—the primary output of the recordal process.

What Does Recordal Encompass? More Than Just Minutes

While Board Minutes are the most common output of the recordal process, the concept is broader. It encompasses any formal documentation of corporate governance in action.

  • Board and Committee Minutes: The detailed recordal of discussions, challenges, decisions, and action points from board meetings and meetings of its key committees (e.g., Audit, Remuneration, Nomination).

  • Shareholder Resolutions: The formal recording of decisions made by the company's members, whether at an Annual General Meeting ([Link to Glossary: AGM]) or via a written resolution.

  • Statutory Registers: The maintenance of the company's official registers (of members, directors, directors' residential addresses, and Persons with Significant Control - PSCs) is a form of continuous recordal of the company's legal structure and ownership.

  • Director's Interests: The formal declaration and recordal of any director's interest in a proposed or existing transaction or arrangement with the company. This is a critical recordal for mitigating conflicts of interest.

  • Signed Contracts and Agreements: While transactional, the formal execution and storage of major contracts represent a recordal of the company's commitments and obligations as approved by the board.

The Critical Importance of Accurate Recordal

A diligent and precise approach to recordal provides layers of protection and strategic advantages for a company and its leadership.

1. Ensuring Legal and Regulatory Compliance

This is the most fundamental reason. As outlined by the Companies Act 2006, keeping accurate records is a legal duty. Proper recordal provides the necessary proof to regulators, such as the Financial Reporting Council (FRC) or the Prudential Regulation Authority (PRA), that the company is operating in accordance with the law and relevant codes of practice.

2. Providing Evidential Proof

Board minutes and other formal records are legal documents. In the event of a legal dispute, a shareholder challenge, or a regulatory investigation, they serve as the primary evidence of the board's decision-making process. They can be used to prove:

  • That a decision was made on a specific date.

  • The information and factors the directors considered.

  • That directors exercised their duties of skill, care, and diligence.

  • That conflicts of interest were properly declared and managed.

A well-drafted set of minutes can be a director's best defence against allegations of negligence or breach of duty.

3. Fostering Accountability and Action

Recordal is not a passive activity. By formally documenting resolutions and assigning specific action points with deadlines and responsible individuals, the recordal process drives performance. It transforms discussion into a clear plan of action and creates a framework for follow-up, ensuring that the board's strategic decisions are implemented effectively throughout the organisation.

4. Preserving Corporate Memory

Directors and executives change over time. Without a clear and comprehensive record of past decisions and the rationale behind them, new leadership is left without context. This can lead to repeating past mistakes or reversing sound strategies. A robust archive of formal records acts as the company's "corporate memory," ensuring continuity, consistency, and informed decision-making for the future.

5. Building Stakeholder Confidence

Investors, lenders, auditors, and other key stakeholders need assurance that the company is well-governed. A clear, professional, and transparent record of board activities demonstrates that a competent and diligent board is overseeing the company's affairs. This builds trust and confidence, which can be crucial for securing investment and maintaining a positive market reputation.

Best Practices in the Recordal Process

The quality of the recordal is directly dependent on the process used to create it. This process typically falls under the remit of the Company Secretary or a designated governance professional.

Before the Meeting

  • Structured Agenda: A well-planned agenda is the blueprint for the meeting and, subsequently, for the minutes. It should clearly list all items for discussion and decision, ensuring the recordal will be logical and comprehensive.

  • Supporting Papers: Circulating board packs with all relevant information well in advance allows directors to be prepared, leading to a more focused discussion that is easier to record accurately.

During the Meeting

  • Clear Chairmanship: The chair plays a vital role by summarising complex discussions and clearly stating the resolutions being put to a vote. This clarity is essential for the minute-taker.

  • Expert Minute-Taker: The person responsible for the recordal should be independent, have a strong understanding of Corporate Governance, and be skilled in capturing the essence of the discussion without getting lost in verbatim detail. Their focus should be on decisions and rationale, not a transcript.

After the Meeting

  • Prompt Drafting: Minutes should be drafted as soon as possible after the meeting while the discussions are still fresh in the minute-taker's mind. Delay is the enemy of accuracy.

  • Review and Challenge: The draft minutes should be circulated to the chair for initial review, followed by the full board. This provides an opportunity for directors to correct any inaccuracies or omissions.

  • Formal Approval: The minutes of a meeting must be formally approved by the board at a subsequent meeting and then signed by the chairman of that meeting. This act of signing formally attests to their accuracy and transforms them into an official record.

  • Secure Storage: Once approved, all records must be stored securely. The Companies Act 2006 specifies that records must be kept at the company's registered office or a Single Alternative Inspection Location (SAIL) and be available for inspection.

Recordal in the Digital Age: The Role of Board Portals

Traditionally, the recordal process involved paper, binders, and wet-ink signatures. In the modern era, this approach presents significant security, efficiency, and logistical challenges. Board management software, often known as board portals, has revolutionised the process of recordal.

BoardCloud provides a secure, centralised platform to manage the entire lifecycle of the recordal process:

  • Agenda and Pack Distribution: Agendas and board papers are distributed securely through the platform, creating an automatic audit trail of who accessed what and when.

  • In-Meeting Annotation: Directors can make private notes directly on documents within the portal, which can aid their review of draft minutes.

  • Efficient Drafting and Review: The Company Secretary can draft minutes and circulate them for review through a controlled workflow. Directors are automatically notified, and their feedback can be managed centrally, eliminating confusing email chains and version control issues.

  • E-Signatures: The formal approval and signing of minutes can be handled digitally with legally binding electronic signatures, drastically speeding up the finalisation of the record.

  • Secure, Centralised Archive: Most importantly, the platform creates a single source of truth. All approved minutes, resolutions, and supporting documents are stored in a highly secure, encrypted, and permission-controlled digital archive. This not only meets the statutory requirement for secure storage but also makes it incredibly easy to search and retrieve historical records for audits, due diligence, or director induction.

Using a board portal transforms recordal from a fragmented, paper-based administrative task into a streamlined, secure, and integrated digital governance function.

FAQs about Recordal

Q1: How much detail should be included in the recordal of board minutes?

This is a critical question of judgment. The minutes should not be a verbatim transcript of the meeting. Instead, they should be a concise summary that captures the key points of the discussion, the range of views expressed (particularly any significant dissent), the factors considered by the directors in making their decision, the precise wording of any Resolution that was passed, and a clear record of the decision itself. The goal is to provide enough detail to demonstrate that the directors have fulfilled their duties of care, skill, and diligence, without including superfluous or potentially misleading information.

Q2: Who is ultimately responsible for the accuracy of the recordal?

While the Company Secretary or a designated minute-taker typically drafts the records, the ultimate responsibility for their accuracy lies with the entire board of directors. Each director has a duty to review the draft minutes and ensure they provide a fair and accurate reflection of the meeting's proceedings. The Chairman of the meeting who signs the approved minutes is formally certifying their accuracy on behalf of the board.

Q3: How long must company records, such as minutes, be kept in the UK?

The Companies Act 2006 (Section 248 for directors' meetings and Section 355 for members' meetings) mandates that minutes must be kept for at least ten years from the date of the meeting or resolution. However, many companies choose to keep these records for the entire life of the company, as they form a crucial part of the corporate memory and can be invaluable in legal or historical contexts that extend beyond a decade. It is considered best practice to retain them indefinitely.