Resolutions by Circulation: Conditions, Common Mistakes and the Record

On Sunday the board secretary writes to the seven directors: a bank's financing offer lapses on Thursday, and approval by circulation is requested. Three directors approve on Monday. The fourth asks about a clause, receives an amended copy from the finance director, and approves that. On Wednesday the chief executive signs. Eight months later the auditor asks which version the first three directors approved.

Nobody in this story acted in bad faith, and it is an example, not one client's case. The resolution it produced is still weak and hard to defend. This article covers the conditions for a resolution by circulation, the mistakes that recur, and how one runs in Approv.

What it is and when it is valid

A resolution by circulation is a decision passed without a meeting. The text goes to the members separately and each votes from where they are. Boards use it, and so do board committees, executive committees and procurement committees inside organisations.

For the board of a Saudi joint-stock company, Article 82 of the Companies Law restricts this route. The matter has to be urgent, and no member may have asked in writing for a meeting to deliberate on it. A majority of all members has to approve, and the resolution then goes before the board at its next meeting. Board quorum and proxies sets out these rules in detail.

Internal committees follow their own charter. Some charters allow circulation for every decision, and some limit it to amounts below a threshold. A valid circulation therefore starts with reading the charter, before anyone drafts the email.

Five mistakes that weaken the resolution

The first mistake is counting the majority among those who replied. A seven-member board needs four approvals. If five reply and three of them approve, the resolution has not passed, however much it looks like a majority.

The second is amending the text during the vote. Every change after the first vote turns the earlier votes into approvals of a different text. If the text has to change, withdraw the request and circulate it again in its final wording.

The third is a vote with no closing date. An open-ended circulation ends when someone decides it has ended, and that someone usually has an interest in the approval.

The fourth is ignoring a request to deliberate. When a director writes that the matter needs discussion, on a joint-stock company board that is a request for a meeting. It is not a no vote that a majority can override.

The fifth is forgetting the next meeting. A resolution that never enters the minutes of the following meeting remains correspondence in the secretary's mailbox.

What goes into the request

A good request lets a member vote without asking a question. It carries the proposed resolution in its final wording, not a general description of it. It states the amount where there is one, the reason for urgency, the documents it rests on, and the date voting closes.

The reason for urgency is more than a formality. When an auditor asks why this decision could not wait for the next meeting, the answer should be written in the request itself, dated before the decision.

Circulation in Approv

The requester creates a request with a title, the text, the cost and the attachments, and picks the committee that will vote. The organisation can require a review before circulation, so the request reaches members only after a user with review permission approves it. That step suits a secretary who wants to confirm the papers are complete first.

Each member receives a private link by email or SMS, with no account and no password. Where the organisation has enabled verification, the member enters a four-digit code sent to their mobile or email before voting. The member then approves or rejects and can add a note.

Approv records a vote once and does not let the member change it. On the voting page, members see their colleagues' votes and notes, much as each director raises a hand in front of the others at a meeting.

The majority is counted from all members

Approv calculates the approval percentage from every member of the committee, not from those who voted. That removes the first of the five mistakes, because the count no longer depends on anyone's judgement.

Each request has a maximum duration in days. During it, Approv sends alerts by email and SMS to members who have not voted, at an interval the organisation sets and up to a maximum number. When the period ends the request closes on its own: approved if the decision rule is met, rejected if it is not, with the members who did not vote recorded as such. A committee can also choose to close a request as soon as the rule is met, without waiting for the remaining votes.

The record for the next meeting

The request log keeps everything that happened: its creation, each vote with the member's name, note, time and verification method, each alert sent, and the reason it closed.

Approv produces a PDF of the request with the vote table, the notes and the alert history. Once the request is closed, the file carries a digital seal from the system. The secretary prints it or attaches it to the agenda of the next meeting, so the resolution enters the minutes.

Limits worth knowing

Approv has no option to abstain or to approve with reservations. A member with a reservation writes it in the note and chooses approve or reject.

Members cannot hold a discussion inside a request. Each has one note with the vote. A matter that needs deliberation belongs in a meeting, which is what the Companies Law intends when it limits circulation to urgent matters.

The digital seal on the file is not a signature by the members. If the organisation's charter requires their signatures on the resolution, that remains a separate step. Approv does not write the minutes, and it does not judge whether a matter is urgent. That call stays with the chairman and the secretary.

Before the next circulation

Take the last three resolutions your board or committee passed by circulation and ask of each: how many members approved, out of how many? Which version? When did voting close? Which minutes record it? If any answer needs a search through email, the resolution is documented in the secretary's memory and not in the organisation's records.

Electronic voting for boards and committees explains decision rules and mandatory members in detail. This article is general guidance and not legal advice; reviewing the articles of association and the committee charter with legal counsel remains a necessary step. To walk through your committees' charter and how it maps to Approv, use the contact page.