Michelmores Michelmores
Michelmores Michelmores
  • Home
  • Expertise
  • People
  • Insights & Events
  • Careers
  • About
  • ESG
  • Contact
Share
Published October 2nd 2023
Home > News & Insights > Article

The VC Series – Board of Directors and Board Meetings

Businessman Giving Speech During Seminar With Coworkers In Office
Author
Harry Trick
Harry Trick

‘The VC Series’ is a series of articles aimed at founders who are thinking of raising funds from VCs. Further information about The VC Series can be found here.

In this article we will look at the sort of protections that venture capital investors will expect to see when it comes to the composition of the board of directors and the practicalities of holding board meetings.

Board Meetings

Venture capital investors will expect board meetings to be held once a month or once every other month. VC investors will then expect that an agenda and accompanying papers are provided to each director in advance of any such meeting.

Our experience is that prior to investment, founder teams often don’t hold board meetings in a formal way or with such regularity, so this can often be a bit of a culture shock!

The articles of association will also set out the number of directors that are required to attend a board meeting for it to be quorate. Often this will be structured in such a way that a meeting requires a founder director and an investor director to be in attendance, with the meeting adjourned if a quorum isn’t present. For the adjourned meeting, you would expect any director present to constitute a quorum, as you wouldn’t want a particular director to be able to frustrate business by not attending.

Investor Representation

A venture capital investor will typically require the right to appoint at least one non-executive director to the board, and this will be enshrined in the investment documentation.

Whether the investor then appoints a director will be a decision for them bearing in mind potential conflicts of interest and the taking on of fiduciary duties – this is why, where an investor does not take up its right to appoint a director, they will instead require the right to appoint an observer to the board.

What is an Observer?

An observer is an investor representative who is entitled to receive notice of, and participate in, board meetings, but are crucially not able to vote on any decision.

Non-Executive Directors

A crucial part of a venture capital investor’s due diligence process will be assessing the strengths and weaknesses of the key leadership roles within the company and considering whether the company’s management team and board of directors have the necessary experience and capabilities to make a success of the business and their investment.

Where gaps are identified, the investor may require that the company appoint at least one other non-executive director to the board, who will typically have experience advising companies in a similar sector and on a similar growth trajectory. It is obviously important that this person is the right fit, so we would recommend that founders be as involved as possible in the process of identifying the right candidate.

Committees

Venture capital investors might also require that the company set up committees to help oversee certain functions of the business. The most common examples are:

  • a remuneration committee, which is tasked with deciding on compensation for senior management and granting share options; and
  • an audit committee, which is responsible for overseeing financial reporting and signing off the accounts.

The composition of the committees will be a matter for negotiation, but you would normally expect a majority of the members to be non-executive directors.

Final Thoughts

This has been quite a general overview of board minutes and some related provisions to bear in mind, At Michelmores we pride ourselves on being approachable and are lucky enough to have acted for numerous great founders in their investment journey so feel free to reach out to a member of the team if you have any questions or concerns about your investment/board meetings after entering into investment documents and we will be more than happy to help guide you through the process.

The VC Series – Next Article

The next article in The VC Series will deal with vesting of founder shares and leaver provisions.

You can find details of all the different articles in the VC Series here.

If there is anything that we have not covered which you would find useful, then please let us know.

Share
Author
Harry Trick
Harry Trick
EVENTS
MAINstream Cheltenham Pitch Event
MAINstream Cheltenham Pitch Event

Applications for this pitch event close Friday 16 May 2025. Following the success of MAINstream South West, we are delighted to be launching MAINstream Cheltenham...

MORE
04/06/2025 3:00 pm
Malmaison, Bayshill Rd, Cheltenham GL50 3AS
EVENTS
MAINstream
MAINstream South West 5th Anniversary Event

Applications for this pitch event close Wednesday 4 June 2025. Join us to celebrate five years of MAINstream and MiVentures! We will be hosting our...

MORE
25/06/2025 3:00 pm
Quayside Distillery, Exeter
EVENTS
MAINstream
MAINstream Pitch & Drinks Event

Applications for this pitch event close Wednesday 3 September 2025. If you are interested in joining the network and attending our events please email mainstream@michelmores.com for further...

MORE
24/09/2025 3:00 pm
Exeter - Venue TBC

Contact us

+44 (0) 333 004 3456

enquiries@michelmores.com

Subscribe to updates

  • Quick Links
    • Online Payments
    • People
    • About
    • Careers
    • Staff Login
  • Legal & Regulatory
    • View all policies
    • Privacy Policy
    • Website Terms
    • Cookie Policy
    • Modern Slavery Act

Locations:

  • london
  • cheltenham
  • bristol
  • exeter

© Michelmores LLP is a Limited Liability Partnership, authorised and regulated by the Solicitors Regulation Authority (SRA authorisation number 463401) and registered in England and Wales under Partnership No. OC326242.
The registered office is Woodwater House, Pynes Hill, Exeter, EX2 5WR. A list of the members (all of whom are solicitors or barristers) is available for inspection at the registered office and at michelmores.com

  • © 2025 Michelmores LLP. All rights reserved
  • Website maintained by Appeal Digital