Recordal

What Is Recordal? A Guide to Creating the Official Corporate Record

In the world of corporate governance, there is a simple but powerful axiom: "If it wasn't recorded, it didn't happen." Every decision, every appointment, and every significant event in a company's life must be formally documented to have legal standing and to form part of its official history. This crucial process is known as recordal.

Recordal is the formal act or process of creating an official, written record of a fact, event, or decision for legal, governance, and administrative purposes. In a corporate context, it is the deliberate and disciplined practice of documenting the company's actions and affairs to create a permanent, verifiable, and authoritative account. It is the act of transforming conversations and decisions into the company's official memory.

The purpose of recordal is multifaceted: it provides indisputable proof of corporate actions, ensures transparency, meets stringent legal obligations, and forms the bedrock of accountability. This guide provides a comprehensive exploration of recordal as a critical governance discipline in South Africa, detailing what must be recorded, why it is so important, and how the process has been transformed by modern technology.

The Legal Imperative: Recordal under the Companies Act

The practice of recordal is not merely a matter of good housekeeping; it is a fundamental legal obligation imposed on all companies in South Africa by the Companies Act, 71 of 2008.

The Core Requirement: Section 24 - Company Records

Section 24 of the Companies Act is the central pillar of corporate record-keeping in South Africa. It unequivocally mandates that every company must keep accurate and complete records, in written form or in a form that can be easily converted to written form. This duty is absolute and applies to all companies, regardless of size.

The Act specifies a number of key records that require formal recordal and maintenance:

  • The company’s Memorandum of Incorporation (MOI) and any alterations or amendments to it.

  • A record of the company’s directors, including specific details for each director.

  • Copies of all reports presented at an Annual General Meeting.

  • Copies of all Annual Financial Statements and accounting records.

  • Notices and Meeting Minutes of all shareholders' meetings.

  • Meeting Minutes of all meetings of the Board of Directors and any Board Committees.

  • Copies of all written Resolutions passed by the board or by shareholders.

  • The company’s securities register (or share register).

The Evidentiary Power of Formal Recordal

The Act imbues these formally recorded documents with significant legal power. For instance, Section 73(7) states that any Meeting Minutes that have been signed by the Chairman of the Board are, in the absence of evidence to the contrary, proof of the proceedings of that meeting. The formal act of recordal—drafting, approving, and signing the minutes—is what creates this powerful legal evidence. This can be crucial in defending the board's decisions against a legal challenge, as it provides a verifiable account of the process that was followed.

The Governance Significance: Recordal through the Lens of the King IV Report

The principles of the King IV Report on Corporate Governance™ elevate recordal from a legal compliance task to a strategic governance function.

A Foundation for Transparency and Accountability

The entire philosophy of King IV is built on the principles of transparency and accountability. Formal recordal is the primary mechanism for achieving both.

  • Accountability: Without a clear and accurate record of what was decided, by whom, and when, it is impossible to hold the board or management accountable for their actions. The recordal of decisions and action items is the first step in the chain of accountability.

  • Transparency: Proper records provide transparency into the workings of the board and the company, giving shareholders and other stakeholders confidence that the company is being managed with integrity.

Creating the "Explain" Narrative

King IV's "apply and explain" regime requires companies to do more than just tick boxes; they must provide a narrative account of how they are achieving good governance. Accurate and comprehensive records—from committee reports to the minutes of strategic discussions—are the essential source material for this narrative. They provide the concrete evidence to support the company's governance disclosures in its integrated report.

A Deep Dive into Key Recordal Processes

The act of recordal is a structured process that varies slightly depending on the nature of the information being documented.

The Recordal of Meeting Minutes

This is one of the most important recordal processes. It involves several distinct steps:

  1. Capture: The Company Secretary takes detailed notes during the meeting.

  2. Drafting: These notes are transformed into formal, objective draft minutes.

  3. Review: The draft is typically reviewed by the Chairman of the Board for accuracy.

  4. Approval: The draft minutes are circulated to the full board and are formally approved by a resolution at the next meeting.

  5. Finalisation: The Chairman signs the approved minutes. This final act completes the formal recordal, and the minutes are entered into the company's official minute book.

The Recordal of Resolutions

A Resolution is the ultimate output of a decision, and its recordal must be precise.

  • In-Meeting Resolutions: The exact, final wording of a resolution passed at a meeting must be recorded verbatim in the minutes for that meeting.

  • Written ("Round-Robin") Resolutions: For resolutions passed without a meeting under Section 74 of the Act, the recordal consists of the collection of the documents signed by the required majority of directors, along with evidence of when the decision was finalised.

The Recordal of Director Information

The Act requires a formal record of all directors. This "Director's Register" is a living document. The act of recordal occurs whenever there is a change—a new director is appointed, a director resigns, or a director's details change. The Company Secretary is responsible for recording these changes in the register and filing the necessary forms with the Companies and Intellectual Property Commission (CIPC).

The Challenges of Traditional Recordal and the Digital Solution

For centuries, corporate recordal was a paper-based affair, involving physical minute books, share ledgers, and filing cabinets. While traditional, this method presents significant risks and inefficiencies in the modern era.

The Perils of Manual and Paper-Based Record-Keeping

  • Physical Vulnerability: Paper records are susceptible to fire, flood, theft, and simple misfiling. The loss of a company's minute book can be a catastrophic governance failure.

  • Accessibility Barriers: Critical records stored in a single physical location are inaccessible to directors who are remote, travelling, or working from home. This hampers agile decision-making and effective oversight.

  • Profound Inefficiency: Finding a specific resolution or a set of minutes from several years ago can involve a time-consuming manual search through dusty archives.

  • Integrity and Security Concerns: Paper records can be altered, pages can be removed, and there is no clear audit trail of who has accessed or handled the documents.

How BoardCloud Transforms Recordal into a Strategic Asset

A modern board portal like BoardCloud digitises and secures the entire recordal process, turning company records into a strategic asset.

  • A Secure, Centralised Digital Vault: BoardCloud provides a single, cloud-based repository for all of the company's critical governance records. Stored in an encrypted, access-controlled environment, the information is protected from physical threats and unauthorised access.

  • Automated and Integrated Recordal: The platform streamlines the very act of recordal. The process of drafting Meeting Minutes, having them digitally approved, and applying a secure E-Signature creates a complete, legally robust, and time-stamped record automatically.

  • Instant Accessibility and Powerful Searchability: Authorised users, such as directors and the Company Secretary, can securely access any record from anywhere in the world, on any device. The platform's powerful search functionality allows them to find any specific minute, resolution, or report in a matter of seconds.

  • An Immutable Audit Trail: This is a key advantage of digital recordal. The platform automatically creates a permanent, unchangeable audit trail. It logs when a record was created, who has viewed it, when it was approved, and every version that ever existed. This provides an unparalleled level of integrity and defensibility for the company's official records.

Frequently Asked Questions (FAQ)

What is the difference between "recordal" and "record-keeping"?

While closely related, "recordal" is the specific act of creating an official record (e.g., the signing of the minutes). "Record-keeping" is the broader, ongoing process of maintaining, storing, managing, and ensuring the integrity of all the company's records over time.

Who is responsible for the recordal of company records in South Africa?

The Company Secretary is typically the custodian and administrator of the company's records. However, the Board of Directors is ultimately and collectively responsible for ensuring that the company complies with all the record-keeping requirements of the Companies Act.

How long must company records be kept in South Africa?

The Companies Act and other legislation specify different retention periods for different types of records. For foundational governance documents like the MOI, meeting minutes, and resolutions, it is considered best practice to retain them permanently for the entire life of the company.

Are digital records legally valid in South Africa?

Yes. The Electronic Communications and Transactions Act (ECTA) gives full legal force and effect to electronic documents and data, provided that the method used for storing the information is reliable and that the information can be accurately accessed and used for subsequent reference. A secure platform like BoardCloud is designed to meet these requirements.

Conclusion: The Bedrock of Corporate Memory

Recordal is not a passive, backward-looking administrative task. It is an active and forward-looking governance discipline that forms the bedrock of a company's memory and its legal standing. It is the fundamental process that provides the evidence for the transparency, accountability, and effective leadership demanded by the King IV Report and the legal compliance required by the Companies Act. In an era where information integrity is paramount, the transition from vulnerable paper-based systems to a secure, accessible, and auditable digital platform for the recordal of governance information is an essential step for any well-governed South African company.