NACD’s 2012 Report Card
Monday morning’s keynote speech given by NACD President and CEO Ken Daly was a “report card” on the organization’s progress. Daly began with highlighting some of the actions NACD has taken on behalf of the director community, primarily the work done with regulators. Over the past year, NACD has worked with the Center for Audit Quality and others to develop a tool to improve the evaluation of outside auditors. It is the NACD’s hope that this tool brings a new level of transparency to the work being done by auditing firms. In the months ahead, NACD will also explore new methods to describe “actual pay” for corporate executives. A definition—and the director perspective–for this term is crucial.
Daly then asked the audience to join him on a “trip to the future” and spoke about a major risk ahead: asymmetric information. This risk is often not understood and underappreciated. Information typically flows from the company executives but at times may be wrong or incomplete. Directors relying solely on management’s information may not have the full details to make wise and informed decisions. Daly challenged the audience to go back to their boardrooms and do two things: acknowledge that asymmetric information is inherent in the boardroom, and create a process to identify when that risk has become too high. While challenging, these two tasks should help improve the decision making in the boardroom.
Next, Daly unveiled a major NACD initiative called NACD Directorship 2020. This project is intended to identify the skills and resources needed to succeed in the boardroom in 2020 and beyond. Over the next several years, NACD will shape its educational programs to prepare directors to effectively serve their organizations for years to come.
To end his speech, Daly said that the NACD has grown to become the premiere source for director education and resources. Over the past several years, the question has gone from “why are you a member of NACD” to “why aren’t you a member of NACD.”