Board consent is the signed document that records a company board’s formal approval of a corporate action. It turns a decision into an official, documented authorization. section 26.1.4 section 6.3
For a major company decision:
- Put the action on the board’s agenda. section 26.1.4
- Hold the required official meeting and take a vote. section 6.3
- Keep the signed consent and approval records with the company’s documentation. section 26.1.4
A financing round
When angels invest, the board consent captures the board’s approval of the financing. It sits alongside stockholder consent and other transaction documents, but it is not the same thing as stockholder approval. section 6.3
The practical lesson is uncomfortable but useful: papering up major decisions can protect management and reduce the risk of shareholder lawsuits by showing that the board formally approved what happened. section 26.1.4
