Working Group on Director Accountability and Board Effectiveness Releases Expanded White Paper on Director Responsibilities

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Key findings report absence of consistent internal review process for venture-backed company CEOs. Eleven new members join the working group on director accountability and board effectiveness from U.S. and Israel.

A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors

The Working Group on Director Accountability and Board Effectiveness, a member association of venture capitalists, CEOs and industry thought leaders, today announced the release of their expanded white paper. The paper, entitled, "A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors" focuses on establishing standards in venture-backed company board education. The white paper contains new material related to the process for annual CEO review, the logistics associated with individual director and board performance evaluation, and mapping the venture-backed company's stage of development to its needs for both corporate governance and internal controls process.

The Working Group on Director Accountability and Board Effectiveness also announced the addition of eleven new members, bringing the total number in the Group to thirty-three. The eleven new members include a Stanford University Professor, a Harvard Business School Professor, venture capitalists from Israel and across the United States, an audit partner at an accounting firm, and leading attorneys from global firms.

Process Evaluation of the CEO's Performance Challenged

An instrumental finding of the white paper concerns the evaluation of the CEO. According to Working Group Chairman, Pascal N. Levensohn, Founder & Managing Partner of Levensohn Venture Partners, "Anecdotal evidence in the venture capital industry today suggests that the CEO is the least reviewed employee of the typical venture backed company. This is another example of the absence of process which plagues our industry when it comes to maximizing board effectiveness," Levensohn added.

"We need to see greater application in the VC board room of effective methods to measure CEO and director accountability," said Professor Tom Byers of Stanford University and a new member of the Working Group. "Conducting an annual CEO review should not be optional -- it is an important management tool for both the board and the CEO. Regrettably, in many venture-backed companies, this tool remains on the shelf," Byers added.

Links Between a Company's Development Stage, Internal Controls and Governance Process Revealed

The white paper also released new information mapping the venture-backed company's stage of development to its needs for corporate governance process and internal controls. "Too many emerging private companies do not consider the importance of internal controls, even at the pre-revenue stage," observed Ms. Leinani Nakamura, audit partner and internal controls specialist at accounting firm Mohler, Nixon & Williams and a new member of the Group. "This important addition to the white paper makes clear and practical recommendations that every audit committee should consider."

Working Group Expands To Thirty-Three Members

The new Working Group members include prominent professors from Harvard University and Stanford University as well as others from top-tier venture capital, law firms and an accounting firm.

The new members are: Tom Byers, Stanford University; Ira Ehrenpreis, Technology Partners; Michael Greeley, IDG Ventures; Morgan Jones, Battery Ventures; Steve Maxwell, Kodiak Venture Partners; Adi Pundak-Mintz, Gemini Ventures Israel; Kate Mitchell, Scale Venture Partners; Leinani Nakamura, Mohler, Nixon & Williams; Bart Schachter, Blueprint Ventures; Allison Leopold Tilley, Pillsbury Winthrop; and Noam Wasserman, Harvard University.

Summary of White Paper Contents

"A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors" is a thirty-six page white paper which contains eight content-rich sections. They include:

  • Introduction to the Unique Characteristics of VC-Backed Companies;
  • Why VC-Backed Companies Should Proactively Self Regulate;
  • How to Achieve an Aligned and Effective Board;
  • How to Link Development Stage, Governance Process, and Internal Controls;
  • What To Know About Legal and Business Basics Before Joining the Board;
  • How to Evaluate Your Own Participation on the Board;
  • How to Conduct an Annual Performance Evaluation of the CEO;
  • How to Conduct an Annual Board Peer Review.

"A Simple Guide..." and two other white papers are freely available at For more information, contact Pascal Levensohn, Chairman of the Working Group, Founder and Managing Partner of Levensohn Venture Partners (pascal @


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