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Most Popular NACD Blog Posts of 2012

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Here are some of 2012’s most popular NACD Blog posts as measured by unique page views.

  1. Self-Reflection: Three Questions Boards Must Answer. Three essential questions drive the assessment process.
  2. PCAOB Weighs Pros and Cons of Mandatory Audit Firm Rotation. Alex Mandl, chairman of Dell’s audit committee, spoke on behalf of NACD at the PCAOB’s public meeting last March to share the director perspective.
  3. Five Boardroom Deficiencies: Early Warning Signals. At NACD’s Director Professionalism course in Charlotte, N.C., faculty member Michael Pocalyko listed the five boardroom deficiencies he has observed in almost every recent corporate failure.
  4. Undertaking an Honest Self-Assessment: Is Your Board Aligned? How boards conduct the assessments starting with the questions in post #1.
  5. Five Takeaways From Conference. The five takeaways from the 2012 Annual Board Leadership Conference, according to NACD’s Research team.
  6. Alphabet Soup: A Director’s Guide to Financial Literacy and the ABCs of Accounting and Auditing. Alexandra Lajoux’s guide to the seven roadblocks that impede understanding of accounting and auditing standards.
  7. An Update From the SEC. A mid-year update on SEC rules largely affecting the compensation committee.
  8. Five Guiding Points for Directors in the Digital Age of Corporate Governance. Former BD Chairman and CEO Ed Ludwig’s fundamentals for achieving sustainable long-term shareholder value creation.
  9. NACD Spearheads Alternative Solution to Mandatory Audit Firm Rotation. The collaborative effort to develop an alternative solution to PCAOB’s proposed rule mandating audit firm rotation.
  10. PCAOB’s Proposed Mandatory Audit Firm Rotation Misses the Point. NACD President and CEO Ken Daly on why mandating audit firm rotation will not necessarily improve auditor independence and objectivity.

NACD’s Top Five Articles and White Papers of 2012

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Read through this year’s most downloaded resources to see what directors found useful in 2012.

  1. Governance Challenges—2012 and Beyond: Featuring the guidance and thought leadership from six of NACD’s strategic content partners, this publication offers a forward-looking perspective on the issues dominating boardroom discussion. Topics covered range from ten to-do’s for audit committees and the basics of compensation to board preparations for crisis situations.
  2. Bridging Effectiveness Gaps: A Candid Look at Board Practices: To combat the risk of asymmetric information, NACD partnered with McGladrey to host four small gatherings—at NACD chapter locations across the nation—of executives and directors in an effort to find ways of improving the communication and relationships between the board and C-suite. From these candid conversations, this white paper was created.
  3. Audit Committee Annual Evaluation of the External Auditor: This tool is the result of a collaborative effort of organizations dedicated to strengthen audit committee performance and transparency. It was also referenced in NACD President and CEO Ken Daly’s remarks during the October 2012 PCAOB Roundtable on mandatory audit firm rotation. This tool is scalable and specifically includes an examination of the auditor’s independence, objectivity, and professional skepticism.
  4. 2012 Risk Oversight Advisory Council Summary of Proceedings: The inaugural meeting of the NACD Advisory Council on Risk Oversight met telephonically during one of the worst hurricanes to hit the eastern seaboard in a century. During the abbreviated meeting, discussion focused on two areas: allocating the work of risk oversight and the new paradigm of reputational risk for corporations today.
  5. 2012 Nominating/Governance Committee Chair Advisory Council Summary of Proceedings: The third annual meeting of the NACD Nominating/Governance Committee Chair Advisory Council reinforced the sentiment that nominating and governance committees are navigating an increasingly challenging environment. The Council focused on how nominating and governance committees are revisiting their director evaluation and succession processes in the context of both new regulations and the rapidly changing global markets.

Effective Board Minutes

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Even the most conscientious and reasonable directors serve with the possibility of facing a lawsuit in state or federal court. In the decade after Sarbanes-Oxley, board minutes have emerged as an important litigation tool for both the prosecution and the defense. While minutes continue to be essential to internal recordkeeping, they must also be crafted to stand up to judicial scrutiny if needed.

Incomplete or inadequate minutes can serve as the basis for prosecution for obstruction of justice, and some have expressed concerns that minutes may act as road maps for litigants. Minutes that fail to show due diligence in a board’s decision-making process reflect either poor minutes or poor process—both can be detrimental to directors defending themselves from liability. On the other hand, minutes capable of demonstrating the process behind well-informed board decisions, may be key evidence in any board’s defense. Directors should not fear “beefing up” minutes with details from meetings if they are doing their jobs competently.

With few formal rules surrounding the drafting of board minutes, directors may receive conflicting guidance on how to best represent board meetings. The National Association of Corporate Directors, with input from the Society of Corporate Secretaries and Governance Professionals, has put together a white paper outlining five board minute fundamentals. These fundamentals, based on a study of various recommendations, should serve as a framework for directors to review, interpret, and eventually approve the minutes. This white paper gives directors a firsthand look at full board and committee meeting minutes. A complimentary copy of Corporate Board Minutes: A Director’s Guide is available to all members.