Ken Daly’s 2015 Letter to NACD Membership
Dear NACD Members,
As I look ahead to the challenges that boards will face in 2015, I am more confident than ever in NACD’s mission to help directors navigate an increasingly complex environment. Our programs and resources remain focused on helping directors improve their performance as strategic assets for their organizations. We achieve this primarily by providing the foresight to anticipate emerging issues, thereby enhancing stakeholder confidence in the board’s ability to provide effective leadership.
I’d like to briefly share with you the three critical issues that NACD will focus on this year.
1. Cybersecurity. It will surprise no one that cyber-risk oversight has become a top agenda item for boards. NACD’s latest survey found that the majority of directors are dissatisfied with the cybersecurity information they are getting from management. How well does your board understand the company’s cyber risk practices? Does your board have an established response plan in the event of a cyber-breach? These are the issues that NACD will continue to help directors resolve throughout 2015.
Suggested NACD Resources:
– Director’s Handbook on Cyber-Risk Oversight
– NACD Advisory Council on Risk Oversight: Cybersecurity Oversight and Breach Response
2. Board-Shareholder Communications There’s no question that shareholders will continue to influence boardroom agendas in 2015. In our most recent meeting with major institutional investors, we asked the participants to list their priorities for board focus in 2015. The three areas identified were: (1) focusing on “drivers” of effective board leadership, (2) holding directors accountable when investors believe shareholder rights have been undermined, and (3) ensuring communication between boards and investors are about context, not volume. We will continue to meet with both institutional investors and activist shareholders throughout the year and will share their perspectives with you.
3. Strategy. You may be wondering why strategy is on this list. Isn’t oversight of the organization’s strategy an inherent responsibility of the board? The answer is still yes. However, in an increasingly dynamic climate, boards can no longer afford to take an annual “review and concur” approach to management’s strategy. Our 2014 Blue Ribbon Commission Report strongly recommends continuous board engagement with management in the strategy development, and course correction, process. Our members’ reaction to this new – and potentially radical – approach has been very positive, and we will continue to provide guidance on this topic in 2015.
Suggested NACD Resources:
– NACD Blue Ribbon Commission on Strategy Development
– The Board’s Role in Strategy: Interview with General Mills Director
Two final notes. Our NACD Directorship 2020 initiative, which puts a spotlight on the market disruptors that will impact companies in the years to come, continues to be very popular. We will hold three member-exclusive events again in 2015. Please be sure to register early as the sessions tend to sell out.
We are holding our inaugural NACD Strategy and Risk Forum in San Diego on May 12-13. The forum will include a full day dedicated to cybersecurity, with former Department of Homeland Security Secretary Tom Ridge as a featured speaker. Click here to learn more about this exciting new program.
Thank you for your membership. I wish you a successful year ahead and encourage you to continue to work with your dedicated NACD Concierge to identify the educational programs and topical resources to enhance your board leadership.
Chief Executive Officer
National Association of Corporate Directors
Advancing Exemplary Board LeadershipTM