Signed Without Standing: Auditing Committee Authority Before the Regulator Reads the Minute
The minute is not the decision
In a regulatory file, a board or committee minute often carries more weight than any other document. It appears to show that the right people met, considered the right information and reached a decision. That appearance is useful until someone asks a narrower question: was the committee, on that date, constituted and empowered to take that decision at all?
A minute records what a secretary wrote down. It does not, by itself, prove that the meeting was quorate, that interested members were excluded, that the committee’s terms of reference were current or that the decision fell within its delegated authority. When those foundations are missing, the paper trail may show a decision that the committee could not properly make.
For UK compliance teams, this is not an academic governance point. Regulatory files frequently rely on committee approvals to demonstrate oversight, challenge and control. If the underlying authority is weak, the file may fail the most basic test: can the firm show who decided, with what power, on what basis and with what effect?
Where quorum failures hide
Quorum problems rarely announce themselves. They sit in the gap between the constitution and the paperwork. Common examples include an attendee list that records attendance but not membership; an alternate attending without a provision permitting alternates; a member with a conflict counted towards the quorum; or a committee operating below its minimum composition after a resignation that was never reflected in the register.
Other failures are more subtle. Remote attendance may be treated as presence even where the articles or terms of reference do not allow it. A written resolution may be signed by the wrong pool of members. A chair may exercise a casting vote that the constitution does not confer. A meeting may be held before appointments took effect, or after terms had expired.
Each of these points matters because quorum is not a headcount exercise. It is a test of whether the body had the right people, in the right numbers, with the right standing, at the right time.
Delegated authority is a separate test
A committee can be quorate and still lack power. The schedule of matters reserved for the board, the committee’s terms of reference and any formal delegation may set thresholds, conditions or exclusions. A committee may be entitled to approve a policy but not a transaction above a stated value. It may be permitted to note a report but not to authorise a change in control. It may be able to delegate to an executive sub-committee only where that sub-committee’s membership and remit are recorded.
Problems arise when delegation is assumed rather than documented. A minute may say the committee ‘approved’ a matter that was only ‘noted’. A decision may have been taken by the chair between meetings and later ratified without evidence of urgency or authority. A delegation may have expired, or a sub-committee may have acted outside the terms under which it was created.
These are not drafting quibbles. They determine whether the decision in the file has a valid source of authority.
A five-step file review
1. Reconstruct the constitution at the date
Start with the company’s articles, the board’s schedule of matters reserved and the committee’s terms of reference as they stood on the meeting date. Check appointment and resignation dates, not just the current position. Confirm any amendments to terms of reference and whether they were approved by the correct body.
2. Test the attendee list against quorum and conflicts
Compare attendees with the membership register. Identify whether each attendee was a member, an alternate, an invitee or a secretary. Check whether any member was conflicted and whether the quorum requirement excluded interested members. Confirm whether remote attendance counted and whether the chair had any additional vote.
3. Trace the delegation chain
Identify the source of the committee’s authority for the specific decision. Check thresholds, conditions and any sub-delegation. Confirm that the person or body that imposed the condition also had power to vary it. Look for decisions taken outside the committee’s remit and later presented as if they were within it.
4. Read the minute against the resolution
Separate discussion from decision. Identify the precise resolution, the votes and any conditions. Check whether the minute records dissent, abstentions or conflicts. Look for language that blurs ‘noted’, ‘approved’, ‘endorsed’ and ‘ratified’. A minute that records a decision in general terms may not support the specific action later taken.
5. Grade and remediate the defect
Classify each decision as sound, curable or defective. Curable defects may be addressed by fresh approval from the correct body, ratification where legally available or correction of the record. Defective decisions may require disclosure, re-taking the decision or revisiting the underlying action. Record the remediation and update the register, terms of reference and minute templates to prevent recurrence.
Reading the file as a regulator would
A regulator is unlikely to begin with an allegation of bad faith. It is more likely to ask a simple question: show me the authority for this decision. If the answer requires reconstructing membership from memory, explaining an undocumented delegation or treating a discussion as an approval, the file is exposed.
The practical response is to audit before the question is asked. Select the decisions that matter most in the regulatory file, test them against the constitution as it stood at the time and remedy the gaps in a controlled way. A minute should be evidence of a decision, not a substitute for the authority to make it.
