165. Minute Book

The minute book is frequently looked upon as a necessary evil and kept accordingly. The minutes often read somewhat as follows:

The regular meeting of the board of directors was held at the bank on Tuesday, June 14th, 1909, at twelve o'clock noon, at which a quorum was present.

The president was in the chair.

The minutes of the last meeting were read and approved.

The loans and discounts made during the month were read and approved. VI - 19

Sundry matters pertaining to the welfare of the bank were discussed.

There being no further business, the meeting was adjourned.

....................................

Secretary.

The minute book is the record of the official acts of the board of directors and should be kept in such complete shape that no question could ever be raised as to whether or not a question had been properly passed upon by them.

In the first place, some items require a majority vote of the entire board. It is therefore essential to state the names of the directors who were present at the meeting. Section 39 A of the New York State law requires that some officer be designated to prepare and submit to each director or trustee at each regular meeting of the board, or to an executive committee of not less than five members of such board, a written statement of all purchases and sales of securities, and of every discount and loan, exclusive of discounts and loans of less than $1,000, made since the last regular meeting of the board, describing the collateral to the loans so made as of the date of the meeting at which such statement is submitted. Such statement shall also contain a list giving the aggregate of loans and discounts to each individual, firm, corporation or association, whose liability to such corporation has been increased $1,000 or more since the last regular meeting of the board, together with a description of the collateral to such loans held by such corporation at the date of the meeting at which such statement is submitted. A copy of such statement, together with a list of the directors present at such meeting, verified by the affidavit of the officer or officers charged with the duty of preparing and submitting such statement shall be filed with the records of the corporation within one day after such meeting, and be presumptive evidence of the matters therein stated.

The aim of the law is to compel directors to direct, and the very best way to convince the examiner that they are doing so is to file this report or one of a similar nature in the minute book. If a report of this kind is not required, a good substitute is to have the members of the board present at the meeting sign the discount register, after having the same read to them. A full memorandum should be made on the minutes.

Meetings of the board of directors are very formal affairs, and should be conducted on parliamentary lines. No "sundry matters pertaining to the welfare of the bank" should be "discussed" unless recorded on the minutes, except that such informal discussions might be in order after adjournment or before. If a matter is worthy of discussion, it is worthy of a motion.

There are several loose-leaf minute books on the market which make it possible to have typewritten records. A book typewriter will accomplish the same purpose in a bound book. Typewritten records require the services of a trusted stenographer.