The "Change Board Members" workflow will allow you to initiate or record changes to your Board of Directors. You will need to have the ‘Governance Workflow Access' permissions in order to gain access to this workflow.
Objective of Workflow
This workflow allows you to document a board member change in your Board of Directors that happened previously, and/or actively add or remove a board member in the present. The successful completion of this workflow will involve approval from your Board and Stockholders (if applicable).
Running the Workflow
This workflow can be found in the Governance section of the 'Available Company Workflows' page. The first page of this workflow will ask for the updated board structure and give you the ability to add, remove, or edit a board seat. The next page will ask you to indicate how you would like to obtain your Board and Stockholder approvals. You can obtain approvals in the following ways:
- Have the system create the Board/Stockholder consents right now as part of the workflow.
- Use your drafted document to request approval. Using your consent draft, the system will attach a signature page to it and circulate it for signature. You will have the opportunity to specify if there are resolutions included in this draft that are currently blocking other workflows. Doing so will release those workflows as well upon receiving approval.
- Approve in a separate workflow. Selecting this option will prevent you from completing this workflow until approval is captured. This option allows you to bundle resolutions from this and other workflows or custom resolutions your attorney may need to include all at once. The resolutions needed for this workflow will be queued the next time you run a new Board Consent, Board Meeting Minutes or Stockholder Consent workflow.
- If this approval has already occurred you will be able to upload a previously signed document to approve this action or select one already in your data room.
- For the Stockholder consent ONLY, "waive" will be an option - this means no shareholder consent is needed. This choice should generally be made in consultation with your counsel.
Here's a screenshot of what those options will look like:
You have the option to waive Stockholder approval if your company does not require it. If you are uploading an approval, you will be asked to provide the document on the next page.
After entering the necessary information, you will arrive at the checkpoint page. The checkpoint page will give you a chance to review the documents involved and make any edits needed. Each document on this page will have a PDF document that should be downloaded and reviewed. Your company may require this workflow to be reviewed and released by legal counsel. If legal review is not required, you will have the option of requesting your legal counsel review the documents. You can also select if you want someone besides your legal counsel to review your documents.
Approval from the Board of Directors and Shareholders (unless you’ve waived the shareholder consent) is required for this workflow. If you chose to create the Board/Shareholder consents in the system or upload an existing draft as part of this workflow, then your Board Members/Shareholders will be asked to review and sign their respective consents. Once you proceed past the checkpoint, the workflow will begin collecting the signatures from the board.
What if I don't have all the required information for this workflow?
If you have started the workflow and need to gather additional information, you have two options for continuing. The system will save your progress in the workflow if you need to finish the workflow at a later time. To reopen the partially completed workflow, click on the orange link for that workflow in your 'Workflows' panel on the company workspace dashboard. You can also use the 'discard' button to end the workflow and start from scratch once you have the necessary information.
What is the difference between board seats and board members?
The system allows you to change the number of board seats, as well as change the number of board members filling those seats. These are two separate concepts. You may change both, or just one.
As an example, you might increase your board from 2 seats (with 2 founders filling the seats), to 3 seats (adding Bob the investor to the 2 original founders to make 3 people filling those seats).
If you have questions about how many seats or people should fill your board, you might consider speaking with your lawyer.
What if my Board Member Resigned?
When you remove a board member during this workflow, it will prompt you to enter the termination type and then provide their resignation letter if applicable. If you’re not sure if your board member resigned, please consult your lawyer.
If you indicate in the platform that your board member resigned, you’ll be asked to provide the board member’s letter of resignation. You can also defer the letter of resignation if you don't have it handy.
Please note: If you say a board member didn't resign, their signature will also be required as a part of this workflow. Conversely, a board member who resigned will not be asked to sign off on updates or changes to the board of directors.
Fidelity does not provide legal or tax advice
Screenshots are for illustrative purposes only.
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