Board Resolution: Ratification of Prior Actions of Officers

Summary

This is a template board resolution used to ratify the actions of corporate officers taken prior to the meeting of the board. This template includes practical guidance and a drafting note. A fundamental axiom of corporate governance is that a board of directors sets corporate strategy and exercises oversight and control over management's implementation of its directives set forth in resolutions of the board of directors. This entails a tacit recognition that directors do not (and cannot) themselves exercise managerial control over every aspect of the corporation's day-to-day affairs. However, it is part of a board's fiduciary duty of care to remain actively engaged and to become sufficiently knowledgeable of the material aspects of the corporation's affairs. In actuality, this means that the board relies on senior managers—corporate officers—to distill upwards to its attention only those things it needs to be continuously informed of. Then, only after the board's sufficient probing of the corporate officers will the board have duly exercised its fiduciary duty of care such that it can then ratify all prior corporate actions during a particular time interval. In this way, the board's ratification will be covered by the presumptive defense of the business judgment rule. For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit. For a full listing of key content covering Board Resolutions for Private Company Corporate Governance, see Private Company Corporate Governance Board Resolutions Resource Kit. For more information on corporations generally, see Corporations.