Board members clause: Copy, customize, and use instantly
Introduction
A board members clause outlines the rights, responsibilities, and composition of the Board of Directors. It governs the selection, roles, term lengths, and expectations of each board member. This clause ensures that the governance structure is clear and that all members are aligned with the company’s vision and values.
Below are templates for board members clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard board members clause
This version includes basic governance responsibilities.
The [Company] shall have a Board of Directors consisting of [X] members. Each member will be elected by the shareholders at the annual general meeting and will serve a term of [X] years, subject to re-election. Board members shall be responsible for overseeing the company's management, setting strategic goals, and ensuring compliance with legal and regulatory obligations.
Board members clause with independent directors
This version includes independent directors.
The [Company] shall ensure that at least [X] members of the Board of Directors are independent, with no material relationship to the company other than their role as directors. Independent directors will be responsible for overseeing financial reporting, audits, and compensation decisions, providing unbiased judgment on company matters.
Board members clause with nomination committee
This version includes a nomination committee for board member selection.
The Board of Directors shall establish a Nominating Committee composed of [X] directors, responsible for identifying and nominating new board members. The committee will ensure that all nominated individuals possess the necessary skills, expertise, and experience to serve effectively on the Board.
Board members clause with performance evaluation
This version includes performance evaluations for board members.
The performance of each board member will be evaluated annually by the Nominating Committee. The evaluation will consider attendance, contributions to strategic discussions, and overall effectiveness in supporting the company's governance. The results of the evaluation will be used to guide any recommendations for re-election or removal.
Board members clause with minimum qualifications
This version includes minimum qualifications for board members.
Each board member must meet specific qualifications, including experience in [industry], financial oversight, corporate governance, and risk management. The Board may establish additional qualifications as necessary to align with the company’s strategic goals.
Board members clause with board member removal process
This version includes a process for removing board members.
A board member may be removed from the Board of Directors by a majority vote of the other directors or by a vote of [X]% of the shareholders. Removal may occur due to failure to attend meetings, breach of fiduciary duty, or other actions deemed detrimental to the company’s interests.
Board members clause with term limits
This version includes term limits for board members.
Each board member may serve no more than [X] consecutive terms on the Board of Directors. After the completion of their term limit, a board member may be re-elected after a break of [Y] years, allowing for fresh perspectives and new leadership.
Board members clause with director succession planning
This version includes director succession planning.
The Board of Directors shall develop and maintain a succession plan for key positions, including the Chairman and CEO. The plan will outline the process for identifying and selecting new directors, as well as ensuring a smooth transition for leadership roles.
Board members clause with director compensation
This version includes compensation for board members.
Board members shall receive compensation for their services, including an annual retainer and fees for attendance at meetings. Compensation will be reviewed annually by the Compensation Committee and adjusted based on the company’s performance and industry standards.
Board members clause with meeting frequency and attendance requirements
This version includes requirements for board meeting frequency and attendance.
The Board of Directors shall meet at least [X] times per year. Board members are required to attend at least [Y]% of scheduled meetings, either in person or virtually. Directors who fail to meet this attendance requirement may be subject to removal or replacement.
Board members clause with rights to call special meetings
This version includes the right for board members to call special meetings.
Any board member may call a special meeting of the Board of Directors by providing [X] days’ notice to the other members. Special meetings may be called to address urgent matters that require immediate attention, and decisions made at these meetings will be recorded for ratification at the next scheduled board meeting.
Board members clause with access to company information
This version includes access to company information for board members.
Each board member shall have access to all relevant financial, legal, and operational information related to the company. Board members are entitled to request additional information as necessary to perform their duties effectively, and the company shall provide such information promptly.
Board members clause with director’s fiduciary duties
This version outlines the fiduciary duties of directors.
Each board member has a fiduciary duty to act in the best interests of the company, exercising care, loyalty, and good faith. Directors shall avoid conflicts of interest and disclose any personal interests that may conflict with their duties to the company.
Board members clause with non-disclosure agreement
This version includes a non-disclosure agreement (NDA) for board members.
Each director shall sign a non-disclosure agreement (NDA) to protect the company’s confidential information. The NDA will remain in effect during the director’s tenure on the Board and for [X] years after their departure from the company.
Board members clause with board meetings conducted in person or remotely
This version allows remote participation in board meetings.
Board meetings may be conducted in person or via teleconference, video conference, or other remote means. Directors will be provided with notice of meetings and the necessary materials to participate effectively, regardless of the format of the meeting.
Board members clause with independent chairperson
This version includes the role of an independent chairperson.
The Chairman of the Board shall be an independent director, responsible for leading the Board’s discussions and ensuring that board members act in the best interests of the company and its shareholders. The independent Chairman will also facilitate the evaluation of the CEO and senior management.
Board members clause with directors’ duties of care and diligence
This version includes duties of care and diligence for board members.
Board members shall perform their duties with the care, diligence, and skill that a reasonably prudent person would exercise under similar circumstances. Directors must stay informed and act with reasonable judgment when making decisions on behalf of the company.
Board members clause with rotation of board positions
This version includes the rotation of board positions.
The [Company] will rotate certain key board positions, including the roles of Chairman and committee chairs, every [X] years. This rotation will ensure fresh perspectives in leadership and help avoid excessive concentration of power within any single individual.
Board members clause with right to appoint alternate directors
This version includes the right to appoint alternate directors.
Shareholders holding at least [X]% of the company’s shares have the right to appoint an alternate director to attend meetings and vote in their absence. Alternate directors will have the same rights and responsibilities as the primary director they represent.
Board members clause with committees and subcommittees
This version includes committees and subcommittees within the board.
The Board of Directors may establish committees and subcommittees to focus on specific areas of governance, including audit, compensation, and nominations. Each committee will be responsible for reviewing relevant issues and making recommendations to the full Board.
Board members clause with decision-making by majority vote
This version includes decision-making by majority vote.
Decisions of the Board of Directors will be made by a majority vote of the directors present at the meeting, except where a higher threshold is required by law or the company’s articles of incorporation. In the case of a tie vote, the Chairman shall cast the deciding vote.
Board members clause with liability protection for directors
This version includes liability protection for directors.
The company will provide indemnification and liability protection to its directors for actions taken in good faith and within the scope of their duties. This protection will cover legal expenses, settlements, and judgments incurred by directors in the course of their work on behalf of the company.
Board members clause with qualifications review
This version includes regular qualifications reviews for board members.
The qualifications of each Board member will be reviewed annually by the Nominating Committee to ensure that the members possess the appropriate experience, expertise, and skills necessary to effectively oversee the company’s operations and strategy.
Board members clause with special board committees
This version includes special committees formed by the Board.
The Board of Directors may form special committees to address specific issues, such as strategic initiatives, legal matters, or crisis management. These committees will operate with clear mandates and report back to the Board with recommendations.
Board members clause with periodic rotation of committee members
This version includes periodic rotation of committee members.
The members of each Board committee shall rotate every [X] years to ensure diversity of thought and encourage a broad range of perspectives in committee decisions. The Nominating Committee will review and approve committee rotations.
Board members clause with removal for failure to perform duties
This version includes removal due to failure to perform duties.
Directors may be removed from the Board for failure to perform their duties, including failure to attend meetings regularly, neglecting fiduciary responsibilities, or engaging in behavior detrimental to the company’s interests. The decision to remove a director will require a vote of the Board or shareholders.
Board members clause with term limits on Board Chair
This version includes term limits for the Board Chair.
The Chairman of the Board shall serve for a term of no more than [X] consecutive years, after which they must step down. This policy ensures leadership refreshment and promotes diversity of perspectives in the company’s governance.
Board members clause with director conflict of interest disclosures
This version includes requirements for conflict of interest disclosures.
All directors are required to disclose any potential conflicts of interest, including financial interests or personal relationships that may affect their impartiality. Directors must complete a conflict of interest disclosure form annually, and any conflicts must be addressed according to the company’s conflict resolution policy.
Board members clause with staggered election process
This version includes a staggered election process for board members.
Board members shall be elected in staggered terms, with one-third of the Board being elected each year. This structure ensures continuity while allowing shareholders to regularly assess the composition of the Board and make necessary changes.
Board members clause with director independence criteria
This version includes criteria for determining director independence.
The [Company] will define specific criteria for director independence, including financial or business relationships that may influence a director's ability to act in the best interests of the company. Independent directors will play a crucial role in overseeing audits, executive compensation, and corporate governance.
Board members clause with mandatory resignation for non-attendance
This version includes mandatory resignation for board members who miss meetings.
A director will be required to resign from the Board of Directors if they miss more than [X]% of scheduled meetings in any [Y]-month period, unless the absence is due to extraordinary circumstances approved by the Board. Resignation will be effective immediately upon notice.
Board members clause with performance-based compensation for directors
This version includes performance-based compensation for directors.
The compensation of Board members will be tied to the company’s performance, with directors receiving bonuses or equity compensation based on achieving specific financial or strategic targets. This alignment encourages board members to focus on the company’s long-term success.
Board members clause with mandatory board member education
This version includes a requirement for ongoing board member education.
Directors must participate in ongoing education programs to stay current with industry trends, regulatory changes, and governance best practices. The company will provide access to relevant courses, seminars, and conferences as part of the Board members’ development.
Board members clause with board evaluation by external consultants
This version includes evaluation by external consultants.
The Board of Directors will engage an external consultant to conduct an evaluation of the Board’s effectiveness every [X] years. The evaluation will assess areas such as decision-making, leadership, and overall governance. The results of the evaluation will guide future improvements.
Board members clause with special approval for related-party transactions
This version includes special approval for related-party transactions.
Any transactions between the company and its directors, officers, or related parties must be approved by the Board of Directors or an independent committee of the Board. The company will also disclose these transactions to shareholders in the annual financial report.
Board members clause with CEO and Board collaboration requirement
This version includes collaboration between the CEO and the Board.
The Chief Executive Officer (CEO) shall work closely with the Board of Directors to ensure alignment between company strategy and operational execution. The CEO will report regularly to the Board on progress toward strategic goals and seek feedback on critical decisions.
Board members clause with nomination of non-executive directors
This version includes the nomination of non-executive directors.
The Nominating Committee will recommend non-executive directors for election to the Board, ensuring that the company benefits from independent oversight. Non-executive directors will provide strategic advice and help maintain objectivity in the company’s decision-making processes.
Board members clause with rights to inspect company records
This version includes the right for board members to inspect company records.
Directors have the right to inspect any company records or documents that they deem necessary to fulfill their duties. This includes financial statements, contracts, and other business records. Such requests must be made with reasonable notice and for legitimate company purposes.
Board members clause with approval of major financial decisions
This version includes the approval of major financial decisions by the Board.
The Board of Directors shall approve all major financial decisions, including capital expenditures over [X] dollars, investments, and debt issuances. The Board will review these decisions to ensure they align with the company’s strategy and financial health.
Board members clause with voting by proxy
This version allows voting by proxy.
Directors may vote by proxy on Board decisions in cases where they cannot attend meetings in person. Proxies must be submitted in writing before the meeting and will carry the same voting rights as an in-person director. The proxy may be revoked at any time before the meeting.
Board members clause with review of board compensation package
This version includes a review of the compensation package for directors.
The Board of Directors will periodically review the compensation package for board members to ensure it is competitive with industry standards and aligned with the company’s financial performance. The review will be conducted by the Compensation Committee and presented to shareholders for approval.
Board members clause with board member qualifications and expertise
This version includes qualifications for board members.
Board members must possess relevant expertise in areas critical to the company’s success, such as finance, law, marketing, or technology. The Nominating Committee will evaluate candidates based on their qualifications, experience, and ability to contribute to the company’s governance.
Board members clause with emergency voting rights for directors
This version includes emergency voting rights for directors.
In cases of emergency where a Board decision must be made quickly, directors may cast votes by phone, email, or secure online platform. The Board will ratify any emergency decisions at the next regular meeting to ensure transparency and compliance.
Board members clause with creation of ad hoc committees
This version allows the creation of ad hoc committees.
The Board of Directors may create ad hoc committees for special projects or issues that arise unexpectedly. These committees will have temporary mandates and will report back to the full Board with their recommendations and findings.
Board members clause with appointment of a lead independent director
This version includes the appointment of a lead independent director.
The Board of Directors will appoint a lead independent director to act as a liaison between the independent directors and the management team. The lead director will also assist in overseeing the board’s performance and facilitating discussions on key governance issues.
Board members clause with professional development opportunities
This version includes professional development opportunities for board members.
The company shall provide Board members with access to professional development opportunities, including training, conferences, and workshops, to enhance their governance skills and keep them informed about emerging trends in corporate governance and industry best practices.
Board members clause with oversight of risk management
This version includes oversight of risk management by the Board.
The Board of Directors shall oversee the company’s risk management framework, ensuring that appropriate measures are in place to identify, assess, and mitigate potential risks. The Risk Management Committee shall report to the Board on a quarterly basis.
Board members clause with regular self-assessments
This version includes regular self-assessments for the Board.
The Board of Directors shall perform a self-assessment annually to evaluate its performance, effectiveness, and alignment with the company’s strategic objectives. This assessment will include feedback from board members, senior management, and external advisors.
Board members clause with rotation of committee chairs
This version includes rotation of committee chairs.
The positions of committee chairs, including those for the Audit, Compensation, and Nominating Committees, shall rotate every [X] years. This ensures that leadership within committees remains dynamic and that new perspectives are brought to critical governance matters.
Board members clause with leadership succession planning
This version includes leadership succession planning for the Board.
The Board of Directors will develop and implement a leadership succession plan, outlining potential candidates for key roles such as the CEO, Chairman, and committee chairs. The plan will be reviewed annually to ensure preparedness for leadership transitions.
Board members clause with financial statement oversight
This version includes oversight of financial statements.
The Board of Directors shall review the company’s financial statements on a quarterly and annual basis. The Audit Committee will present its findings to the Board, ensuring the financial statements accurately reflect the company’s performance and comply with applicable regulations.
Board members clause with removal for conflicts of interest
This version includes removal for conflicts of interest.
A director may be removed from the Board of Directors if a significant conflict of interest is identified that affects their ability to perform their duties in the best interest of the company. Such removal will be determined by a majority vote of the remaining directors.
Board members clause with gender diversity target
This version includes a gender diversity target for board members.
The Board of Directors shall strive to maintain gender diversity and set a target of having at least [X]% female directors. The Nominating Committee will consider gender diversity in its director nominations to ensure the Board reflects diverse perspectives.
Board members clause with annual compensation review
This version includes an annual review of board member compensation.
The Compensation Committee will conduct an annual review of the compensation packages for Board members to ensure they are aligned with market standards and the company’s financial performance. Any adjustments to compensation will require Board approval.
Board members clause with external auditor oversight
This version includes oversight of external auditors by the Board.
The Board of Directors, through the Audit Committee, shall oversee the company’s external auditors, ensuring they are independent, qualified, and performing audits in accordance with applicable standards. The auditors will report directly to the Audit Committee.
Board members clause with creation of a governance framework
This version includes the creation of a governance framework.
The Board of Directors will establish a corporate governance framework to guide the company’s operations, decision-making processes, and relationships with shareholders, stakeholders, and regulators. The framework will be reviewed periodically to ensure alignment with best practices.
Board members clause with shareholder representation on the Board
This version includes shareholder representation.
Shareholders holding at least [X]% of the company’s shares shall have the right to nominate representatives to the Board of Directors. These nominees will be considered by the Nominating Committee and elected by a vote of the shareholders.
Board members clause with responsibility for corporate ethics
This version includes responsibility for corporate ethics by the Board.
The Board of Directors shall oversee the company’s adherence to ethical business practices, ensuring compliance with laws, regulations, and the company’s code of ethics. The Board will receive regular updates from the Ethics and Compliance Committee.
Board members clause with board member indemnity provisions
This version includes indemnity provisions for board members.
The [Company] shall indemnify its Board members against any claims or liabilities arising from their actions taken in good faith and within the scope of their duties as directors. This indemnity will include legal expenses and settlement costs incurred in defending against claims.
Board members clause with requirement for strategic alignment
This version includes a requirement for strategic alignment.
Board members must ensure that all decisions and actions taken by the Board align with the company’s long-term strategy and vision. Regular strategic reviews will be conducted to ensure that the Board’s activities remain in line with the company’s goals.
Board members clause with restrictions on outside business activities
This version includes restrictions on outside business activities.
Directors shall not engage in outside business activities or serve on the boards of competing companies without prior approval from the Board of Directors. The goal is to prevent conflicts of interest and ensure that directors dedicate sufficient time and effort to their duties.
Board members clause with approval for related-party transactions
This version includes approval for related-party transactions.
Any transaction involving a director, officer, or shareholder with a material interest in the transaction must be disclosed to the Board. The Board will review and approve all related-party transactions to ensure they are conducted on arm’s length terms and in the best interest of the company.
Board members clause with right to call for board meeting materials
This version includes the right to request board meeting materials.
Directors are entitled to receive all relevant materials related to Board meetings at least [X] days in advance. This ensures that directors have ample time to review the information and make informed decisions during the meeting.
Board members clause with director liability limitation
This version limits director liability.
The liability of directors for any decisions made in good faith and in the best interests of the company will be limited to the fullest extent permitted by law. Directors will not be held personally liable for actions taken as part of their official duties unless there is evidence of gross negligence or intentional misconduct.
Board members clause with shareholder advisory rights
This version includes shareholder advisory rights.
Shareholders have the right to provide advisory votes on certain matters, such as executive compensation and major corporate actions. While advisory votes are non-binding, the Board will take shareholder feedback into account when making final decisions.
Board members clause with right to call for special committees
This version includes the right to call for special committees.
The Chairman of the Board or any [X]% of the Board members may request the formation of special committees to address specific issues, including mergers, acquisitions, or regulatory compliance. These committees will operate under the oversight of the Board and report regularly on their activities.
Board members clause with director succession policy
This version includes a director succession policy.
The company will maintain a director succession policy that outlines the process for selecting and replacing board members. This policy will ensure that there is a continuous pipeline of qualified candidates to fill vacancies as they arise.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.