Board meetingsIn Early Stage Companies

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Official Responsibilities

The board of directors shall outline the policy of the company and oversee its operations, including the activities of the general manager, and more particularly: (i) determine the company’s plan of action including allocation of monetary and human resources; (ii) examine the company’s financial status and set any credit limits in which company shall operate; (iii) determine the organizational structure of the company and its wage policy; (v) appoint and remove the general manager; (vi) resolve to carry out certain actions which must be carried out by the board of directors pursuant to the articles of association and Law; and (vii) resolve to effect a distribution of dividends. Please note that the powers of the board of directors as specified in this section may not be delegated to the general manager

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And more…

• Maximize shareholder value for all of the company’s shareholders.

• Duties of Care and Loyalty. Fiduciary duty to the company and all shareholders

• Attract, recruit, and retain talented management team and board members. Hiring and firing the CEO and approving officer selection

• Mentor, task, and measure the executive team

• Oversee and promote fiscal, legal, and ethical governance standards

AT CARMEL WE HAVE A DOCUMENT LISTING ALL RELEVANT RESPONSIBLITIES

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Structure

• Defined in the term sheet

• Balance of power (Ownership vs. veto rights and control)

• Usually an odd number, but doesn’t have to be

• Small…

• Important to have an independent board member (industry expert)

• Requires compensation

• It’s another team in your company. An important team.

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Relationship with the CEO

• The CEO is the boss, not the board

• But the key responsibly of the board is to support/replace the CEO

• The board can help drive the direction

• But... Never present the board with an open question

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Meeting Frequency

• Video/Audio conferences are awful

• At least 4 times a year IN PERSON

• Try to make all meetings in Person

• Board members usually require reimbursement of travel expenses

• Bottom line: 4-8 times per year

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What makes a good board?

• You

• Personal chemistry

• Balance of experiences

• “Roles” for each board member

• It’s another important team in your company

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Preparation – The week before

• Board Material: Structure is fixed, content is variable

• Send material ahead of time

• No Surprises

• Discussion, not updates

• Strategy, not tactics

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The board material

• CEO Summary

• Highlights/Lowlights

• Departmental Overview

• One area to elaborate

• Finance: Add full budget + financial summary

• Finance: Add cap table + Changes in ESOP budget etc.

AT CARMEL WE HAVE RELEVANT TEMPLATES FOR BOARD DOCUMENTS

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The meeting

• Location: Always best at your own office. Insist on it.

• 3 Hours (unless special events)

• With management team

• Focus on value for you/company

• Bring the lawyer (depends on the retainer)

• Leave time for executive session

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Post board meeting

• Collect feedback

• Issue action items

• Board minutes

AT CARMEL WE HAVE RELEVANT TEMPLATES FOR BOARD DOCUMENTS

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Know your Rights and Responsibilities

Great Boards are an asset

Boards require attention & management