Board Observer

A person allowed to attend board meetings and usually receive board materials, without voting rights or the legal duties of a director.

Example

A seed fund representative who attends meetings but cannot vote on a sale.

Observers can often be excluded from confidential, privileged or conflicted discussions, and have influence without formal power.

Board Composition — The allocation of board seats among founders, investors and independent directors.
Information Rights — A contractual right for an investor to receive a private company's financial statements and other operating updates on a regular basis.

A board seat, an observer seat and information rights are three very different things — Board directors vote and carry legal duties. Observers attend without voting. Information rights give access to figures without any role in decisions. Knowing which you hold defines what you can do and what you owe. (9 min)
What you learn in one company is not yours to use in another — Investors see confidential information across companies. Handling conflicts, competitive overlap and confidential data properly protects founders, your reputation and your ability to keep investing. (10 min)