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Normally, a board of directors takes official actions during a board meeting. One of the board members will propose a motion, another will second it, and if the board votes to approve the motion then that motion is an official action of the organization that the board has responsibility for overseeing.

The reason for making motions and passing them by vote is that the board as a group has the legal responsibility for overseeing and managing the organization. The board members individually, unless they have been specifically empowered by a previous board vote (for example one of them may have been appointed CEO), do not have authority on their own to make decisions on behalf of the organization.

But sometimes the board needs to make a decision and there either is not time to convene a board meeting, or else it is not convenient. So, outside of a board meeting, how does a board make a decision to help their organization? Typically, the answer is that the board uses a consent document. Many, if not most, corporate by laws allow the board to take official actions using a consent document. And typically the board needs to agree unanimously for the consent to take effect. These unanimous consent documents spell out the specific action to be taken and have a signature page where each of the board members can sign.

This is a great tool for boards to have and to make use of, but there are some challenges that come along with them. First, you want to be able to easily verify that you have gotten all of the required signatures back. This is conceptually straightforward, but there are certainly occasions where a signature gets misplaced and needs to be replaced, sometimes on very short notice!

Also, if your board members have to mail their signatures back, it can take longer to get a consent document done than it does to convent a board meeting in which all of the members attend by phone. It helps a great deal to have an easy way for your board members to get their signatures back to you electronically. And, you also want to keep all of these documents organized and easily accessible for your board to review at a later date, electronically if you can. If you plan to bring on additional investment, these consent documents will also likely be something that your investor will want to take a look at in their due diligence process.

If all this seems straightforward, then you're well on your way taking best advantage of consents and how they can help your board and organization work best. If it seems a little daunting, then there are good tools out there to make it easy. We make one of these tools here at iBoardrooms, and we hope you will consider giving it a try.

Feb 23, 2016 4:07 pm EST