What Does It Mean to be a Board Member?

Explanation

An overriding duty of loyalty to the company applies to every director, whether executive or non-executive and whether or not appointed by a particular shareholder, although the precise legal duties vary according to the type of company and jurisdiction.

A director is expected to devote as much time and resources as is reasonably necessary to perform his or her duties as a director. Attendance at and good preparation for Board meetings should be expected. Directors with special skills may be asked to serve on additional board committees (e.g., directors trained as accountants serving on audit committees).

Recommendation

A board member should be prepared to invest time in their role as a board member to understand the needs of the business and participate in the review and decision making that affects the business. The GP should ensure that its nominated director(s) fully understand their responsibilities to the GP and their legal duties to the portfolio company as a director. GPs and individual directors should familiarise themselves with local legal requirements in this regard.