Board of Directors

A Board of Directors (Board/BoD) is the governing body of a company. The Board’s role is to provide strategic governance and oversight, serving the organization’s stakeholders. Core activities include approving annual budgets, measuring goals and achievements, and hiring and managing the executive team, including compensation.

OCV holds the single board seat for Pre-Seed companies. After a company raises its Seed round, we step down from active board participation.

Fiduciary Duty

Board members (and corporate officers) are fiduciaries who are legally required to put their principals' (such as shareholders/stakeholders) or beneficiaries’ interests above their own. The Board and corporate officers have 3 primary legal duties:

Duty of Care

Fiduciaries have the obligation to provide a level of care that an ordinarily prudent person would exercise in a similar situation. To exercise a duty of care, fiduciaries should make informed decisions, seek advice when appropriate, consider the consequences of their actions, and actively stay informed on company affairs.

Duty of Loyalty

Fiduciaries must act in the best interest of the company and its shareholders rather than in their own self-interest. Fiduciaries may never use information obtained through their position or leverage corporate advantages for personal gain, should avoid conflicts of interest, and should only utilize company resources in good faith towards the best interests of shareholders.

Duty of Obedience

Fiduciaries must not act inconsistently with and should ensure their actions are aligned with the company’s mission.

Actions that require board approval

Founders of OCV companies should be aware that the following actions require approval from the company’s Board:

• Any amendments to corporate bylaws or the company’s certificate of incorporation

• Equity grants: Grants or transfers of any company equity in the form of stocks, options, or warrants to any person or organization

• Any sale or distribution of the assets of the company

• Latest 409A valuations before issuing stock options

• Any distributions to shareholders

• Any borrowing or lending

• Annual budget approval

• Senior management changes in employment status or amendments to their employment contract (including for the CEO)

• Employment contracts representing $150,000 or more per year

• Changes to the company’s employee benefit plans

• Any restructuring of the company, including dissolution

• Any agreements materially important to the company. Partnerships and contracts above $50k are considered material.