Writing Effective Resolutions - Tips on How to Write a Clear and Actionable Board Resolution

Using best practices to write a board resolution is an important step for directors who want to be accountable to their members and beneficiaries. The decisions board directors make represent the final authority of an organisation and, consequently, can have repercussions, not only on the governance of the entity but on its ability to operate. Resolutions formalize important decisions made by the board by putting them in writing.

Having a clear process for writing, presenting, and voting on resolutions is essential to helping a board meet its legal obligations to ASIC and other regulators. A clear and actionable record supports the group’s accountability to its membership and its impact on the community.

What is a board resolution?

ASIC defines resolutions as “a formal way in which a company can note decisions that are made at a meeting of company members”. A board resolution is voted on and passed during a general meeting of directors or a meeting of members of creditors. The process relies on the entity’s constitution, its rules and procedures which require directors to write and decide on the resolution by following best practices and standards.

There are three main categories of board resolutions.

1. An ordinary resolution is presented at general meetings and covers everyday matters related to running the organisation. It requires a majority of votes and can be used to do things like appoint an auditor or elect/re-elect a director.

2. A special resolution is used in exceptional situations when the organisation wants to wind up operations, change its constitution, change duties and responsibilities, or change its legal name. In this case, all members must receive notice of the resolution and 75% of individuals who vote must be in favour of the change for it to pass.

3. A director’s resolution (or circular resolution ) is used to pass a resolution without a meeting. The resolution is recorded in the meeting minutes and can be proposed by a single director or several directors. All directors entitled to a vote must sign and agree to a circular resolution.

Common examples of resolutions include:

• Granting a person authority to sign documents.
• Granting authority to operate a bank account.
• Revoking someone’s authority to sign documents or operate a bank account.
• Appointing or removing a director from the board.
• Appointing or removing a company secretary.
• A decision to enter into a legal agreement.
• A decision to change the location of the company’s registered office or its legal name.

With or without a meeting

Resolutions can be made without a meeting when 100% of directors are likely to vote yes and a meeting is unlikely to change the outcome. If at least one director disagrees with the resolution or the decision involves complex needs or discussion, an ordinary resolution should be made. The board can send a circular resolution by email and ask members to agree by replying by email. Circular resolutions, like ordinary resolutions, must be documented in the minutes.

How to present resolutions

Effective resolutions are clear, concise, and actionable. The organisation’s constitution contains language describing the resolution writing and voting process, including what to do during a general meeting. While the process may vary, members or directors must provide notice in writing of the resolution they are proposing. The written request is made to the board and shared with all voting members in advance of the meeting.

The board resolution statement is distributed to directors and signed by each person if they consent. Company members can also sign resolutions if they agree to them. If a resolution contains multiple statements, the person may sign some items and not others. Resolutions have formatting limits, for example, the constitution may specify that they are no more than 1000 words long, the statement may not be defamatory towards directors, and the members cannot pay the company to share the proposed statement.

The rules written in the constitution about how to write and present a board resolution may vary from organisation to organisation and should include instructions on how to vote. Constitutions can differ depending on the legal structure of the entity.

Who regulates company resolutions?

Company resolutions are regulated by ASIC and based on the Corporations Act 2001. Specifically, section 248A states that “The directors of a company may pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution.”

Section 248B states that “The director of a proprietary company that has only 1 director may pass a resolution by recording it and signing the record.” Recording and signing the declaration satisfied any requirements in the Act. The Act also states that minutes must be kept in a registered office at the main place of business approved by ASIC.

Section 251A of the Act notes that a board must record proceedings and resolutions in the minutes to document what happens during meetings and record when a board resolution is passed without a meeting. The company must ensure board minutes are signed by the chair of the meeting, or, if passed without a meeting, by one of the directors, after the resolution is passed.

How to write a board resolution

Most board resolutions include a title, the date the resolution passed, and the location where the vote took place. The legal name of the entity should be added. Some boards also provide (brief) background information to give context about the issue or proposal they are voting on.

Title example: “Resolution to Allocate Funds to the Annual Fundraiser”

The main parts of the document are the resolution statement and the statement of consent. These sections should use formal language that clearly outlines the board’s decision and responsibilities related to the resolution. The resolution should separate each idea to maintain clarity and, if the decision involves multiple layers of complexity, create several resolutions and vote on them one at a time.

Here is an example of the language used for funding allocation:

“We hereby consent to the adoption of the following… In accordance with the constitution (or bylaws) of the corporation, and by unanimous consent, the board of directors has decided that $50,000 will be allocated to the annual fundraiser budget… “

“It is resolved that the NAME OF THE ENTITY shall deposit $50,000 into the Fundraising Committee’s Account at NAME OF BANK.”

Optional elements in the writing process are the resolution number and information identifying the organisation, such as a company number and its legal name. A unique number can be assigned to each resolution, using the date and consecutive numbering, for example, ‘Resolution 2024-03’. The number can then be used as a reference point should the board need to find it in the future. The number also helps avoid confusion during the circulation of the resolution.

eg “The board chair circulated Resolution 2024-21 30 days before the December 2024 meeting to allow directors time to review the proposed changes to the constitution and to prepare for the vote.”

Since board resolutions are official statements documenting directors’ consent and approval for a proposed action or change, they must include a list of the names of directors and provide a space for them to sign and date. For example:

You can find additional examples of resolutions in the ‘Additional Resources’ section below.

Passing a resolution at a board meeting

When a resolution is presented to the group, the document must be reviewed and signed by all directors entitled to vote. The board members receive identical copies of the statement and should only sign if they agree on the proposal. During the vote, each board member makes their decision. For a special resolution to pass, at least 75% of the votes must be in favour of it, while other resolutions only require a majority, unless the constitution states otherwise.

According to ASIC, “The resolution is considered as ‘passed’ when the last member signs”. To be valid, board resolutions must meet three criteria:

1. they are passed at a meeting that is properly convened and satisfies quorum;
2. they are added to the company’s records within a month of the meeting; and
3. the minutes where the resolutions are recorded are signed by the chair.

Section 251A of the Act requires the board to record a resolution within thirty days of the meeting. Any additional forms required by law must be filed after the meeting. For example, if the resolution is to change the entity’s legal name, change the constitution, or wind up the company, Form 205 must be submitted to ASIC. Using a board management system or board portal to record resolutions can help expedite the work that happens before, during and after board meetings.

Further Reading

What is a circular resolution?

Meeting Minutes, An Essential Guide for Directors

How Well Is Your Board Managing its Scarcest Resource?

Dealing with Disputes in the Boardroom

Three Cheers for the Chair

Additional Resources

Template Constitution (ACNC) -link downloads template-

Sample Resolution 1

Sample Resolution 2

Sample Resolution 3

Free Minute Taking Course

Corporations Act 2001