What Decisions Need Approval From Your Board of Directors

WRITTEN BY: MICHAEL McGRAIL
COOLEY (COOLEY GO)

Michael McGrail of Cooley has a helpful breakdown of the responsibilities upheld by a startup board of directors. We’ve included a short list below- for more context and color around the following items, take a look at his original piece here.

For an early stage company, the following actions will almost always require prior board approval:

• Amendments to the certificate of incorporation or bylaws

• Equity grants or transfers (whether stock, options or warrants)

• Distributions to stockholders

• Borrowing or lending money

• Adopting an annual budget

• Hiring or terminating members of senior management (or amending the terms of their employment)

• Adopting employee benefit plans (401(k), profit-sharing, health insurance, etc.)

• A sale or other distribution of all or substantially all of the assets of the company

• A dissolution or winding up of the company

• Entering into any agreements that could be of material importance to the company (intellectual property licenses, customer contracts, vendor contracts, consulting agreements, office leases, equipment leases, etc.)

“Day-to-day” matters that typically would not require board approval:

• Purchasing office supplies

• Making purchases covered by a budget previously approved by the board of directors

• Signing non-disclosure agreements

• Hiring rank-and-file employees.

Originally Published: What Decisions Need Approval From Your Board of Directors, Michael McGrail