Had an interesting chat with an seasoned sales exec. He's just joined the board of a private equity-backed business and is understandably excited about the opportunity. Always the optimist, I asked him what D&O insurance protection the company has in place. After a long pause, he nervously responded, "uh, good question, I need to check that." He whipped out his Blackberry and sent off an email asking the company for a copy of their policy along with their latest shareholders agreement.
It got me thinking. What represents best practice in welcoming a new director? Here's one idea: even in an early stage start-up, every new director should be issued with a Director's Manual. It's contents should include things like:
- Copies of the directors' confidentiality and non-compete agreements
- A summary of matters reserved for the board (or a list of CEO delegations)
- Basic information about company structure, org charts, background on key execs
- Important legal documents like the shareholders agreement and articles of association
- Minutes of the last six board meetings
- The latest business plan and budget.
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