Board resolutions and mandate agreements: documenting decisions and authorising representation

A board resolution records company decisions with legal force. A mandate agreement authorises an agent to act on the company's behalf. Both are frequently needed and frequently missing.

Board resolutions and mandate agreements

Good corporate governance means two things: that decisions are made by the right people, and that those decisions are properly documented. Board resolutions and mandate agreements are the primary instruments for achieving both.

Board resolution

A board resolution (or shareholders’ resolution) is a formal record of a decision made by a company’s governing body — the board of directors, management board or general meeting of shareholders. It is not just a formality: in many jurisdictions it is a legal requirement, and without it the decision has no binding effect on third parties.

When a board resolution is required

Company law mandates a resolution for:

• Appointment or removal of directors, statutory officers or auditors.
• Approval of annual financial statements.
• Share capital increases or reductions.
• Approval of major contracts (above a threshold set in the articles).
• Authorising the company to take out loans above a defined limit.
• Approval of mergers, acquisitions or asset sales.
• Changes to the articles of association or company name.

Practical situations also requiring a resolution:

• Opening a bank account in the company’s name.
• Authorising an employee or third party to sign contracts above a defined value.
• Approving a dividend payment.
• Granting power of attorney.
• Authorising the company to commence or settle litigation.

What a board resolution must contain

1. Company details — legal name, registration number, registered office.
2. Meeting details — date, time, location (or confirmation of remote participation/written resolution process).
3. Attendees and quorum confirmation — names of board members present and confirmation that quorum was achieved.
4. Resolutions — each decision stated in operative language: “RESOLVED THAT the company hereby approves…”. Number each resolution separately.
5. Voting record — how each member voted (for, against, abstain). For unanimous written resolutions: each member’s signature.
6. Chair’s signature — the minutes must be signed by the chairman of the meeting.
7. Date of signing — the date the minutes are executed, which may differ from the meeting date.

Written resolutions (per rollam)

Many jurisdictions allow the board or shareholders to pass resolutions in writing without a physical meeting, provided all eligible members sign. This is faster for routine decisions. The written resolution must clearly state the decision being made and must be signed by the required majority.

Common mistakes

• No quorum record — if the resolution does not confirm quorum, it may be challenged.
• Vague resolution wording — “approve the deal” is insufficient; name the specific transaction, parties and key terms.
• Missing signatures — a resolution signed by fewer than the required number of directors is ineffective.
• Notarisation forgotten — for resolutions amending the articles or increasing share capital in most EU jurisdictions, a notarial deed is required.

Mandate agreement

A mandate agreement (mandátna zmluva under Slovak law) authorises one party — the mandatary — to carry out a specific commercial activity on behalf of the principal, acting in their own name but on the principal’s account.

Mandate vs. power of attorney

| Feature | Mandate agreement | Power of attorney | |---|---|---| | Legal form | Contract (bilateral) | Unilateral instrument | | Who acts? | Mandatary (in own name) | Agent (in principal’s name) | | Who is the contractual party? | Mandatary | Principal | | Ownership of results | Passes to principal | Principal directly | | Common use | Real estate brokerage, commercial rep | Legal proceedings, asset management |

What a mandate agreement must contain

1. Scope of the mandate — precisely described commercial activity: brokering the sale of a specific property, representing the principal in negotiations with named counterparties, managing a specific portfolio.
2. Mandatary’s fee — commission (percentage of transaction value) or flat fee. When does it vest: on introduction, on execution of a preliminary agreement or on completion?
3. Exclusivity — can the principal engage other mandataries for the same subject matter? An exclusive mandate typically commands a higher fee.
4. Mandatary’s authority limits — can the mandatary bind the principal to a price? Execute a contract? Or only introduce and negotiate?
5. Reporting obligations — frequency of updates, format.
6. Duration and termination — fixed term or indefinite; notice period for either party.
7. Expenses — which costs are reimbursable (marketing costs, travel, legal fees)?
8. Confidentiality — the mandatary has access to sensitive information about the principal’s assets and intentions.

Real estate mandate: Slovak specifics

Real estate brokerage in Slovakia is regulated by Act 186/2009 on financial intermediation. An exclusive real estate mandate (výhradná sprostredkovateľská zmluva) must state clearly that it is exclusive, for what period, and what fee the agency earns on a completed transaction. Clients have a statutory right to terminate on 30 days’ notice.

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Related contract types: Board / shareholders’ resolution · Mandate agreement

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