Matt Marshall’s VentureBeat recently featured a guest article that I contributed on the topic of the need for greater director education across both public and private companies.  My commentary relates the unprecedented HP settlement with the State of California to basic board governance issues that VC directors face. I feel strongly that our industry can take proactive steps to show that we appreciate that good governance is good for business and that we can self-regulate effectively.

Best practices are meant to be frameworks and to provide a process for organizational behavior.  They are not meant to be definitive or all encompassing—particularly in an industry as complex as venture capital.  Other VC bloggers dedicate specific posts or categories to board governance issues—including Brad Feld and Fred Wilson.  Brad’s most recent post on guidelines for recruiting VC directors was right on and well explained.

For the past eight months, I have been working with 22 other VC experts on writing “A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors”.  We came together in May, when I established the Working Group on Director Accountability and Board Effectiveness.

This is the third collaborative white paper that I have been involved with extensively since “After the Term Sheet…” was released in 2003 and “Rites of Passage..” was released in January of 2006.  Both of these papers are freely available for download on the Levensohn Venture Partners website. The main difference between “A Simple Guide…” and the other two papers is that this paper, in addition to building on the themes developed in the others, consists of 3 educational modules and is directed for practical boardroom use. 

“A Simple Guide…” distinguishes between the minimum legal requirements of board service and the minimum business requirements for directors.  It also identifies differences in responsibilities between management, VC, and independent directors.  Self evaluation and peer review are important elements of this document’s recommended best practices to achieve effective, high functioning boards.  We pay significant attention to making these exercises useful and not burdensome to VC companies.

The paper will be released in January. 

Related posts:

1. Web-Based Seminar Will Announce New Venture Board Governance Initiative on February 2 at 9:00 AM PST
2. Professor Noam Wasserman Comments on “A Simple Guide…”
3. Working Group on Director Accountability Releases “A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors”
4. Do You Know Your Responsibilities as A VC Director? Find Out at VC-InsideOut
5. Board Governance Best Practices– Review the CEO Annually

This entry was posted on Saturday, December 9th, 2006 at 9:12 am and is filed under Adult Education, Corporate Governance, Entrepreneur, Levensohn Venture Partners, VC Board Best Practices, Venture Board Governance White Papers, Venture Capital, Web/Tech. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.