How do you write a board of directors resolution?

Any board-led organization needs a way to keep track of the many important decisions involving the board of directors including if it’s a corporation, non-profit, or government agency. After all, the board is the top of the chain of command and has ultimate governance authority and often legal responsibility to be involved in key decisions. 

Being a board member requires providing oversight of operations and decision-making regularly, all to steer organizations in the right strategic direction. The Board of Directors tracks its decisions through board resolutions.

A basic understanding of this process is presented in this article. Learn why and how to formulate an effective resolution of the board of directors. First, let’s explore “What is a board resolution?”

What is a board resolution?

Board resolutions, also sometimes called ‘Directors’ Resolutions’ are records of the decisions the Board of Directors makes when they meet. The board resolution is a formal written motion used to track details of an organization’s specific decision including who voted, their role. The board resolution is a legally binding record and is sometimes included in the Board of Directors board meeting minutes.

Writing a board resolution can often seem intimidating, primarily because of the highly formal tone accompanying most legal advice and the language used to enact a resolution under Robert’s Rules of Order. But once you understand the different components of a standard board resolution document, you’ll see that they are straightforward to fill in. Further below, we will explore some BOD resolution samples, to get a better idea of the standard language and format of these formal documents. 

See related: How to prepare more effective board packages

Why is a board of directors resolution required? 

A resolution of the board of directors is not required for day-to-day activities like reviewing the organization’s financials or discussing strategic opportunities. Still, formal votes, approvals, and documentation are all needed for significant board decisions. In most organizations or corporations, resolutions are typically required for actions with significant financial ramifications, a change in procedures, or a change in governance authority. 

Board resolutions are typically needed for the following actions. Here are some types of board resolutions:

• Entering a long-term lease agreement
• Creating a corporate bank account
• The process of entering into a business contract
• The appointment of officers
• Granting authorization for corporate loans
• Changing the format of board meetings
• To record the decision of shareholders of a company
• Changing the hiring strategy of the company 
• The act of selling shares of a corporation
• If a non-profit wants to delegate funds to a specific project.

For incorporated businesses, upon adoption, a resolution is added to the official corporate book and becomes a permanent part of the corporate record. Government and tax authorities can audit board resolutions at will, despite resolutions not being officially filed (unlike articles of incorporation and annual reports).

How to fill out a resolution of the Board of Directors?

As we mentioned, by adopting a board resolution, a board decides something legally binding. This means the document requires a specific language and a particular pattern to be composed. 

Board of directors resolution format: Here is how to fill out the resolution of the board of directors.

Let’s first examine the components of a typical board resolution. 

You can expect to fill out the following when completing your resolution of the board of directors:

1. Date, time, and location of the meeting
2. Appropriate title about the board’s decision to be made
3. Statement of majority or unanimous decision
4. Lastly, the resolution is stated. This is the action taken by the Board in response to the proposal
5. Officers responsible for carrying out the resolution will be stated
6. Director names and signatures, along with their votes
7. Secretary/chairperson’s name and signature.

When you are just getting started, the layout and language may seem intimidating. Over time, recording these proceedings will become more and more familiar. 

One way to make board resolutions simpler is to use board portal software that automatically helps you track and gather signatures for resolutions at board meetings and in between. 

Create your Board Resolution on a board portal. 

The Aprio board portal allows you to create and share your board resolutions for signature in real-time at a board meeting. 

With Aprio, gathering signatures and tracking resolution dates is simpler.

• You upload a document with the resolution summarized – often during a board meeting and enable signatures
• Members of the board required to sign do so digitally from wherever they are
• Once signatures are complete you have a date-stamped archive of the resolution and who was involved.

In addition to simplifying board resolutions, Aprio’s board portal software provides real-time online access to board materials, engaging directors and voting, while keeping everything secure and in one place. 

Resolution of the board of directors template: BOD resolution samples

Need help getting started? Download a board resolution template or if you are an Aprio portal user talk to our 24/7 support team for guidance from another experienced board administrator.

Archiving corporate board of directors resolution forms

Having a backup copy of your resolutions is extremely important. A board of directors resolution can also be retained in the same place as your board meeting minutes since it is a legally enforceable document.

You can store all your board governance documents in one place, keeping them secure and readily accessible to your distributed team, with Aprio’s paperless board management software. 

What is the resolution of the board of directors SBA? 

Banks require directors’ approval before lending money. Debt must be approved by the board of directors before a company even applies for a loan. Unless the company passes this resolution, it will not be able to borrow money.

The shareholders of a company must authorize officers to borrow funds from a bank before it can go into debt. Most lenders require borrowers to complete and sign a standard resolution. The resolution signifies there was a meeting of the company’s board of directors and that they have approved the company’s debt.

Small Business Administration (SBA) Form 160, Resolution of Board of Directors is a document issued by SBA that can be attached to loans under the Direct, Guaranteed, or Participation categories. In the final step of a loan application process and is submitted to the lender as a Common Closing Form.

There are two parts to the SBA Form 160:

1. resolution;
2. certification.

In compliance with the form requirements, the following information must be included:

• Organization name
• Minimum and maximum loan amounts
• These officers’ names, titles, and signatures
• When and where the Resolution took place
• That meeting’s exact date
• Signature of the secretary attesting to the genuineness of signatures and names provided by officers.

SBA 160 can be filled out manually or electronically. Forms completed electronically must be printed, and signed by hand; e-signature will not suffice. Once submitted, the lender will receive them with the other documents.

It is recommended that the applicant schedule an appointment with a lender relations specialist if he or she has any questions. Local field offices of the SBA have certified specialists on staff. The SBA’s official website provides contact information for these offices.

See related: Best practices for modern board governance in the digital age

Resolution of Board of Directors EIDL

Within six months of loan disbursement, an Economic Injury Disaster Loan (EIDL) Board Resolution must be submitted.  Business owners are usually asked for official documentation proving approval by the Board for the EIDL loan by SBA Loan Officers. Upon loan disbursement, the borrower must provide proof of Hazard insurance within one year.   

Make sure you are in compliance with these requirements by consulting your attorney or law firm, and insurance agent.  

Can a board resolution be signed by one director?

A resolution is generally only signed by one director if a formal meeting does not take place – that’s rare. According to LawDepot, the resolution of the board of directors must be signed by all directors if the board meets formally to discuss the topics contained within minutes of the meeting. In some cases, the resolution may relate to a committee and a subset of directors.  If the resolution is a certified corporate resolution then the president and secretary of the board are also required to sign off.

Takeaways 

Understanding what board resolutions include and how they are structured and written can help alleviate some of the intimidation you may initially feel when starting this process. 

Remember, board resolutions are legally binding documents. Your resolutions need to be signed and dated by all required board members and stored and available if required for future reference or legal purposes. For many boards going paperless and utilizing board management software like Aprio to simplify resolution sign-offs, tracking, and archiving of legal documents ensures that resolutions are done right. 

Ensure good governance and simplify the work of your board of directors with Aprio

Aprio’s board portal software helps board members, executives, and board secretaries and administrators stay organized, make timely board decisions, and run meetings efficiently – all with good governance in place. 

See how Aprio helps streamline board resolutions and other board responsibilities and keep information secure with a custom demo.