Q. Why are co-op board minutes so sparse that others who read them—shareholders, lawyers, brokers—have no real idea what goes on at meetings? This is because minutes are routinely ‘sanitized’ to leave out any troublesome issues, any comments by various board members, or how they voted on decisions. They are so skimpy that future board members will never know historically what previous boards did, and why they did it. I believe boards do this on legal advice, to avoid any possible liability. Is that the reason, or what else could it be? Boards have gone too far with sanitizing, in my view.
—Discontented with Minute Minutes Content
A. “The questioner’s strongly expressed opinions on this subject are entirely understandable,” says Stanley Kaufman, partner at real estate law firm Kaufman Friedman Plotnicki & Grun, LLP in New York City. “Cooperative shareholders want full transparency from their elected boards, and it is not uncommon for shareholders to be dissatisfied with the level of disclosure reflected in board meeting minutes. It is not wrong for shareholders to complain about the level of disclosure, or vote at the next annual meeting to elect new board members who promise to conduct the cooperative’s business with more transparency. However, there are legitimate reasons why a board may want to keep its meeting minutes ‘sparse’ and ‘skimpy.’ Before I discuss some of these reasons, I will address the legal requirements for the content of board meeting minutes.
“New York’s Business Corporation Law (BCL), which applies to the governance of most cooperatives, contains no express requirements for the content of meeting minutes. A cooperative’s bylaws could contain such requirements, but that would be uncommon. Under most cooperative bylaws, it is the duty of the cooperative’s secretary to keep the minutes—although in practice, this duty is sometimes delegated to the co-op’s managing agent.
“The absence of any explicit provisions in the law regarding what minutes must contain does not mean that there are no implicit requirements. BCL 708 requires that actions by the board of a corporation must be taken at a meeting (except when the board members unanimously consent in writing to the adoption of a resolution). Thus, actions taken by a board at a meeting should be reflected in the meeting minutes. For example, if the board votes to adopt a new house rule, to approve an alteration, or to accept or reject a purchase application, that action (but not necessarily how each board member voted) should be reflected in the minutes.