Governance

Why Governance Matters

Strong governance:

• Reduces risk by ensuring decisions are properly authorized and documented.
• Builds credibility with investors and acquirers, who will review your board and stockholder records during diligence.
• Protects leadership by following best practices and taking advantage of legal protections available under Delaware law.

Core Governance Functions

We assist clients with:

• Board and stockholder actions – preparing resolutions and written consents for routine and special approvals.
• Annual and special meetings – ensuring proper notice, quorum, agendas, and accurate minutes.
• Equity-related approvals – option grants, stock issuances, and maintaining an accurate cap table.
• Financing and M&A approvals – documenting new rounds of funding, material contracts, or a sale of the company.
• Recordkeeping – keeping your minute book current and diligence-ready.

Board Meetings: Best Practices

For most venture-backed companies, boards meet six to eight times per year, with additional special meetings/approvals for financings or acquisitions. Best practices include:

• Clear agendas and materials circulated in advance.
• Quorum requirements observed (usually a majority of directors).
• Executive sessions without management present to allow candid discussion.
• Accurate minutes that record decisions and resolutions, but avoid unnecessary detail that could create litigation risk.

Required Board Approvals

Certain actions are outside the “ordinary course” and must be approved by the board, such as:

• Electing or removing officers.
• Amending the certificate of incorporation or bylaws.
• Issuing equity or adopting stock option plans.
• Entering into debt or material contracts.
• Approving budgets and significant hires.
• Selling the company or approving other change-of-control transactions.

Protecting Directors and Officers

Delaware law provides liability protections for directors—and more recently, for certain officers—through exculpation provisions in the company’s charter. These protections shield leaders from monetary damages for breaches of the duty of care (but not loyalty or bad faith). Amending your charter to extend these protections can be critical for attracting and retaining top talent.

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‍How often should my board meet?
Most venture-backed companies meet six to eight times a year, but additional special meetings are common when raising money or approving key contracts.

Do I need to take minutes?
Yes. Minutes are often the first documents investors or acquirers request. They should record decisions clearly but avoid unnecessary detail.

What’s the difference between board and stockholder approval?
Some actions (like issuing stock or approving financings) require both. We guide you on when each is necessary.

How do I protect directors and officers from liability?
Delaware law allows corporations to limit monetary liability for directors and certain officers through charter provisions. These protections are critical for attracting strong leadership.