The Working Group on Director Accountability and Board Effectiveness is a 22 member group of people from VC firms, law firms and resource organizations that periodically write white papers of the structure and effectiveness of VC backed company boards. At the beginning of 2007 they released the white paper “The Basic Responsibilities of VC-Backed Company Directors.” I thought I would read it as I am a junior on my team with very little board experience besides the three boards of which I am a current observer.
The report was broken down into three modules: what you need to know before joining the board, self evaluation and peer review questionnaire. I found the most useful section to be the second module of Self Evaluation as it made me reflect on my performance and value in the board meetings I have attended thus far. It lists the minimum expectations of different participants, with the following requirements for VC Directors:
- Attend all board meetings
- Understand the company’s competitive position and maintain awareness of developments in the relevant industry sector
- Help companies close new business and build sales success outside the board meeting
- Serve as a sounding board for the CEO and, in some cases, mentor the CEO
- Proactively share relevant company knowledge from their portfolio experience with their fellow board members
- Make themselves available for information consultation with management and the board outside of the normal board schedule
- Take a lead role in financing the company
- Contribute their knowledge and experience during liquidity events
- Understand and differentiate between their responsibilities as directors, and their role within their particular fund
- Invite and respect input from non-VC directors, even when those non-VC directors have relatively small ownership stakes by comparison to their own
My employing firm takes pride in trying to be a “value add” and I feel like we definitely try to target the listed items above, yet a review is always good and I will make sure to fill in any gaps that I might not be covering.
