Ken Daly, NACD president and CEO, is featured on CEO Talk Radio discussing how to obtain your first board seat. In the interview, Ken talks about the role that the nominating and governance committee plays in vetting director candidates to ensure that the board’s combination of directors offers skills that are important for the company to achieve its strategic goals.
When choosing a director, the nominating and governance committee creates a matrix that outlines current board composition, as well as skills they want to add to its board. Hot skill sets today include information technology, communications, and global markets expertise, says Daly. More generally, in order to get on the radar of the nominating and governance committee, directors must be able to demonstrate an understanding of the company’s business, but also itsgovernance—including the difference between oversight, which is the directors’ role, and management, which is the CEO’s and management team’s role.
One tool prospective directors can use to get on the radar of the nominating and governance committee is NACD Directors Registry, a robust database of qualified director candidates used by a growing number of nominating and governance committees. Another way to expand board horizons is to get actively involved in director education through events such as the NACD Fellowship Program, the NACD Board Leadership Conference or any of the conferences and forums that NACD conducts around the country. Not only do prospective directors get to learn best practices from corporate governance experts and leading directors, but they will find valuable networking opportunities as well.
Though the Dodd-Frank financial reforms were signed into law a year ago, the corporate governance environment remains at a crossroads of uncertainty in many ways. While business leaders continue to adjust to the sweeping legislative reforms that have already been implemented, regulators are still drawing up the details on a host of issues and deciding how to interpret and implement many other pending regulations.
Many other proposed rules are being enacted without delay, including a host of reporting requirements aimed at director and board accountability. What’s more, shareholders continue to exert pressure by questioning the qualifications of individual directors when they are displeased with board performance or compensation decisions.
Evolving regulatory requirements, combined with recent market fluctuations and an increased scrutiny of the board, will put pressures on board leadership and structures, particularly on the board’s nominating and governance committee.
The strategic landscape is also adding complexity to a director’s job description. One of the board’s primary roles is to approve winning strategies and monitor their execution. Major shifts—from an expanding global marketplace to the rapid pace of technology and data creation—must be considered. And by no means should such oversight be considered an amateur’s venture. Today’s directors need to be well versed on the latest trends and developments that impact their specific industries.
That is why it is crucial to continually assess and optimize a board’s composition and ensure that boards have the right people at the right time—competent directors who possess the knowledge, experience and skill sets most closely aligned with the company’s strategies. Equally important is a board’s ability to establish and maintain a set of policies for board recruitment—and ongoing evaluation and education–that will steadfastly guide a corporation through a business climate that may be at times precarious.
This year’s NACD Board Leadership Conference will host a special Nominating and Governance Committee Forum to help directors identify the leading practices they need to navigate the new and evolving business environment. The forum will feature in-depth insights and analysis that will focus on enhancing the value directors can bring to their corporate tables and examine best practices for board and C-suite cooperation and productivity. Combining classroom sessions with confidential peer discussions, the session will also offer techniques that can be put to work immediately to identify and address strategic and operational gaps on a board.
In today’s complex business world, there’s a growing need for well-rounded directors who stay informed on emerging issues and leading practices. Unlike doctors and lawyers, directors do not have a formal certification program. They must find resources, mentors and peers on their own to help them stay up to speed.
The need for this kind of peer-to-peer director education led the National Association of Corporate Directors to create a specialized course of study, the NACD Board Leadership Program. NACD’s new director credential enables directors to not only demonstrate their dedication and commitment to boardroom excellence, but also to showcase the highest standards of director professionalism and anticipate the unknown by learning from experienced, world-class board leaders.
To become an NACD Board Leadership Fellow, participants must be experienced company directors, complete The Master Class and then complete at least 10 more credits of NACD education within 12 months. Participants are required to take a number of formal, skill-specific learning electives to hone their committee skills, keep their knowledge of board function and purpose up-to-date, and prepare them to offer a 360-degree vision to shareowners, companies and their board colleagues.
After completion of the program, fellows must complete at least 10 credits of NACD director education every year to maintain their status as NACD Board Leadership Fellows.
The first 16 NACD Board Leadership Fellows were recognized at a dinner in New York City in May. Collectively, this elite group represents boards of more than 60 companies and provides a snapshot of the caliber of directors engaged in continuous learning with America’s premier membership organization for board members:
“As a director in today’s rapidly changing corporate environment, board leadership requires keeping current, fresh and, above all, relevant,” said Michael Pocalyko, one of the new NACD Board Leadership Fellows. “NACD events are among the only places where I can speak with my peers frankly, confidentially and unimpeded. By participating in the full range of NACD director education and becoming a Board Leadership Fellow, I get early intelligence on emerging issues—so my boards can engage these issues as opportunities instead of reacting to them as challenges. These advantages not only ground me as a director, but ultimately benefit the companies and the shareholders I serve.”
Directors who are interested in becoming an NACD Board Leadership Fellow can contact NACD’s registrar at 202-572-2088 or email Fellowships@NACDonline.org.