Board and advisory positioning
Who sits at the table changes what the table decides. Board construction is a strategic act, not a formality, and the terms are negotiated once and lived with for years.
Most owners meet governance for the first time as a term sheet clause, which is the worst moment to form a view on it. Protective provisions, information rights, board composition and consent thresholds are all negotiable, and each one is a transfer of decision-making that outlasts the money.
This engagement is as useful for an owner who simply wants better counsel in the room as it is for one taking on institutional capital. A well-built advisory bench is cheaper than a board and often more useful early.
What the engagement covers
Board composition plan
We start from what decisions the board is meant to make. Under G.S. 55-8-03 a board must consist of one or more individuals, with the number specified in the articles or bylaws or fixed in the manner they provide, so seat count and the mechanism for changing it are both drafting choices. An LLC has no statutory board; one exists only because the operating agreement creates it.
Candidate profiles
We write the specification down before anyone is approached. Each seat gets a profile: the experience it is meant to supply, the decisions it will be asked to weigh, the time it demands, and the conflicts that would disqualify a candidate. A director nominated by an investor still owes duties of good faith and care to the corporation itself, and the search is shaped accordingly.
Director and advisor agreements
Duties, term, removal, confidentiality, indemnification and insurance are settled in writing. Under G.S. 55-8-52, unless the articles of incorporation limit it, a corporation must indemnify a current or former director who was wholly successful, on the merits or otherwise, in defending a proceeding brought in that capacity, and only for reasonable expenses. Advancement of costs and broader cover must be drafted. Advisors are not directors; their protection comes from contract.
Compensation design
Pay is set against what the seat actually asks for: cash retainers, meeting fees, equity, or some mix. Advisor equity is usually granted against continued service; where it is, the vesting schedule and the treatment of an early departure carry more weight than the headline number. Authority to fix director compensation sits with the board unless the articles or bylaws provide otherwise.
Information rights and protective provisions
These clauses decide which actions require investor consent, which sets the boundary of ordinary management. Each is priced for what it costs. Separately, G.S. 55-16-05 lets a director inspect and copy the company's books and records at any reasonable time, but only to the extent reasonably related to the director's duties; a refused director may apply to the superior court for the county of the principal or registered office.
Reporting pack and cadence
The work is deciding which numbers the board genuinely needs, where they come from, and who owns each one, then setting meeting frequency with notice and quorum rules to match; a pack that is onerous to assemble tends to lapse. Unless the articles or bylaws provide otherwise, board action without a meeting requires the written consent of every director, which shapes how much can be handled between meetings.
Committee structure
Audit and compensation committees earn their place once full-board discussion stops being efficient. Where committees are formed, the delegation has limits. G.S. 55-8-25(e) bars a committee from, among other things, filling board or committee vacancies, adopting, amending or repealing bylaws, approving action that requires shareholder approval, and authorizing distributions except by a formula, method or within limits the board has prescribed. Charters are drafted accordingly.
Director onboarding
A director who joins without background material spends the first meetings working out how the company makes money. Onboarding closes that gap: charter and bylaws, cap table, current protective provisions, known conflicts, recent board packs, and a plain note on the standard of conduct a North Carolina director is held to. We put that material together before the director is seated.
How the engagement runs
- 01
Governance reviewWhat the documents currently permit and require.
- 02
Composition planSeats, profiles and sequence.
- 03
AgreementsDrafted and executed.
- 04
Cadence in placeFirst pack produced, first meeting run.
Common questions
We are not raising. Do we need a board?
Probably not a board. An advisory bench is often the better answer — lower cost, fewer duties, and you keep control. The question is what counsel you are missing, not what governance structure looks impressive.
An investor is asking for a board seat. Is that normal?
Common, and negotiable. What matters is not only the seat but the protective provisions attached to it: which decisions require consent, and at what threshold. Those clauses do more work than the seat does.
What should we pay a director or advisor?
It depends on stage, time commitment and what they are actually bringing. It is benchmarked as part of the engagement rather than guessed at, and equity for advisors should almost always vest.
How much time does running a board take?
More than owners expect, which is why the reporting pack is designed around what the company can sustain rather than what looks thorough once.
Companies taking on outside capital, seating institutional directors, or forming a formal advisory bench for the first time.
Scoped and fixed.
A scoped call on what this actually needs, before anything is drafted.
Book a consultation or call (704) 222-4752