The recent court order instructing the Passenger Rail Agency of South Africa (PRASA) to make available audio recordings of one of their board meetings has highlighted the urgent need for boards to develop policy around this issue.
When entire High Court cases turn upon sound files, it’s clearly time for companies to accept that recordings of board activities can be pivotal.
At present, there is no standard approach. Some boards allow recording of meetings and some actively discourage it.
As a professional in the compliance, governance and secretarial space, with a few hundred board meetings under my belt, I always encourage clients to record their board meetings.
No matter how good a minute taker is, they cannot flawlessly capture everything discussed in a meeting. A transcription is an excellent backup document to have, when there is disagreement about how decisions are reflected in the minutes. One can even refer back to the original recording for clarity.
The argument against recording of meetings is that it stifles the conversation or discourages people from expressing themselves freely.
Some chairmen choose not to have their meetings recorded, insisting that the role of the minute taker is simply to record decisions, the discussions and the thinking that led to them.
While this is true, no one is infallible, and from time to time a minute taker might misinterpret a discussion, or fail to note that a particular director was a dissenting voice.
Keeping detailed records
Under the Companies Act of 2008, which is influenced by the business law of the United States, there is scope for the South African business environment to become more litigious.
Should this happen, boards of directors would do well to keep accurate and detailed records of their deliberations and discussions.
Firstly, boards need to decide whether recordings will be allowed. Having decided to do that, a company should determine how long recordings should be held for. Will it be only up until the date that the minutes are approved? Or do they keep them for a longer period? Will the recordings be kept indefinitely?
On this continuum, deciding to keep recordings for about a year is a reasonable starting point. The discussions will then remain on file for as long as the topics covered remain relevant to the immediate business context. If questions arise, these will usually come up within that year or until a certain project is finalised.
Companies will also know whether there are any risks specific to their industry – perhaps regarding confidentiality, or the ramifications of frank discussions becoming public.
They would need to take steps to mitigate these risks.
The benefits of keeping recordings of meetings far outweigh the drawbacks. It makes for greater accuracy, and accountability. The technology is easily available and sometimes it is simply expected that recordings will exist. Companies should develop firm policy around it and adhere to it.
Having an accurate, faithful record of decisions and how they were arrived at is also invaluable for reconstructing the logic and discussions at an event when recall is fuzzy.
Currently in the South African business environment directors sit on more than one board and quite often on more boards than they should. They might not see the minutes as soon after the meeting as they should, and their memory may be imprecise. Such people have their plates full and they might not remember making a certain statement. A recording can confirm what was indeed said.
Ultimately, board meetings deal with weighty matters and they should be recorded in audio form – if only for the sake of accuracy. But it is then imperative for companies to develop policy around such recordings – especially regarding how long recordings are kept on file and who has access to them.
In a company following best business practice, technology can help mitigate risk in the operations of the board, a vital decision-making body, therefore technology should be embraced as part of the process.