In my post, Don't Let Your Board Get Too Crowded, I made the point that large boards can become cumbersome - early stage firms generally should limit the board to 5 to 7 directors. 

There are, however, situations where there are more than 7 people who feel entitled to having a seat on the board.  This might arise when there are numerous founders, angels or VCs involved with the company. 

When this happens you will need to help your constituents negotiate against this constraint.  One way to keep some of the involved parties engaged without giving them a board seat is to give them observer rights.  Board observers are entitled to attend meetings and participate in the group's leadership, even though they don't have a formal vote on the board.

Board observer rights are also often requested by VCs when boards are not already over crowded.  This right enables them to bring junior members of their team to the meetings to give the junior staff more experience and provide more support for the company.