Tag Archive: Governance Surveys

“Full Range” Reading: 25+ NACD Deep Dives for 2015

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Have you resolved to become even more proactive and knowledgeable as a director in 2015? I commend you!  As Dr. Reatha Clark King says in the annual Chairman’s letter, which appears in the January-February 2015 issue of NACD Directorship,

[S]trong boards should work with management to stay abreast of the full range of matters that may affect the success of companies. Today the emergence of significant issues on relatively short notice requires both management and boards to adapt more quickly.

To keep you current the first items on your reading list should surely be Directors Daily, NACD Directorship magazine, and the white papers and other timely content that flows from our Advisory Councils, NACD Directorship 2020® events, and many other educational programs.

But in addition to consulting these resources, consider making time for some of our deeper-dive publications, which provide extensive data and comprehensive guidance on key boardroom issues, both perennial and emerging. To help you locate the material that will be of most interest to you, here is a quick (at-a-glance) “catalog” of the most popular and most topical publications on the NACD bookshelves.

NACD’S ANNUAL SURVEYS. These studies cover governance trends among public, private, and nonprofit boards, as well as public-company director compensation. The facts and figures clearly presented here in charts, tables, and graphs—along with nuanced interpretation of the data collected—will enable you to benchmark your board’s practices against your peers’, no matter what size or type of organization you govern.

For more than 20 years, NACD has been tracking governance trends by industry and company size, from multibillion-dollar firms to those with under $50 million in revenues. Topics analyzed include board size, director hours, board priorities, committee variety, and specific practices for the oversight of risk and for CEO succession, to name just a few. While other fine organizations now support the effort to research board practices, NACD surveys are unparalleled in the scope of their topics and the size of respondent pools they cover.

BLUE RIBBON COMMISSION REPORTS. Our widely respected series of Blue Ribbon Commission (BRC) reports is required reading for directors who want to increase their mastery of the many issues facing them. Every year, NACD invites a new and select group of prominent board leaders and subject-matter experts to gather for dialogue about an emerging issue. Chaired by well-known leaders in the business or legal community, the commissions produce authoritative reports that have been cited in legal cases (notably Brehm v. Eisner, 2000) and have even been called “prophetic” by Delaware Supreme Court Justice Jack Jacobs, speaking at the University of Delaware. The following links lead to the most recent editions of 13 of these unique and eminently useful reports.

HANDBOOKS. Last but not least, for a firmer grasp of director duties, you may wish to consider one or more of NACD’s definitive handbooks, which are authored by experts and focus on the “how to” of directorship.

And, coming soon, The Family Business Board, Vol. 2!

Happy reading!

Directorship: The Go-To Guide

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Consistently, the most sought-after skill in new directors is leadership experience, according to NACD’s Governance Surveys. However, regardless of one’s success in management or leading a company, directorship can prove to be a new challenge.

To assist new and potential directors, NACD created a professional development primer to prepare them for the rigors of overseeing a company: “A Practical Guide for Corporate Directors,” part of the Director’s Handbook Series. Originally released in 1996, the guide was updated this year in light of recent regulatory activity affecting the boardroom.

“A Practical Guide for Corporate Directors” recognizes that the determinants of successful directors tend to hold true for all companies—regardless of size or type. By providing the essentials of the boardroom and its practices, the guide can help directors fulfill their responsibilities.

Highlights from the guide include:

1. Board Structure: Committees and Regulations

The guide includes an especially useful primer on board structure. By highlighting the key committees—audit, nominating and governance, and compensation—it provides a foundation for directors on the respective duties of each committee, and how they interact.

2.  Navigating the New Regulatory Environment 

The updated guide also explains the implications for boards of the Dodd-Frank Act, which created numerous regulations governing board structure and operations. For rules such as shareholder access to the proxy, shareholders’ advisory vote on executive compensation (say on pay), and the whistleblower bounty program, the guide provides interpretations and guidance.

 3. The Role of the Board: Nose In, Fingers Out

Ultimately, the board is the top legal authority within a corporation, charged with oversight of all aspects of the business. The guide helps new directors understand the nuances that separate oversight from management. As NACD’s founders put it, “NIFO: Nose In, Fingers Out.” As such, directors should oversee management’s performance of the hands-on tasks necessary to the operation of the business—not personally manage the tasks.

4. Directors’ Fiduciary Duties

Two major components of a director’s fiduciary duties are care and loyalty. The duty of care does not denote caution in this sense; rather, directors should be informed and exercise appropriate diligence and good faith as they make business decisions.

The duty of loyalty is simple: The company comes first. Directors must act in the best interests of the corporation while fulfilling oversight responsibilities—not in the interests of themselves or anyone else.

5. Liability Concerns

Liability arises when directors fail to perform their legal obligation to the company. While directorships entail certain risks to personal wealth and reputation, there are available protections. These protections include statutory reliance and non-fence-sitter laws.

“A Practical Guide for Corporate Directors” is a strong introduction to the boardroom for all directors.