May 20, 2009
NACD Issues America's Challenge for Corporate Directors
Directors Leading the Way
The current economic crisis has eroded public and investor confidence in corporate governance; American corporations must take action to restore the public’s trust. Congress, investors and corporations alike are struggling to find the right answers to improve our current situation and beyond. The National Association of Corporate Directors (NACD) believes that boards seeking ways to improve board performance and corporate oversight need a new, principles-based framework for making governance decisions.
Boards: Four Steps to Take Now
NACD has launched the campaign, America's Challenge for Corporate Directors: Renew Commitment to Corporate Governance and Oversight Excellence, to provide that framework - and the platform - to help boards succeed in today's environment. The framework provided in NACD's Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies, and recommendations for four critical areas of governance practices through the White Papers Series I publication, provide a blueprint for directors to move forward.
Companies large and small, including Aetna, Unitedhealth, and The Home Depot have adopted the Principles. (Click here to learn what NACD Chairman and director, Aetna, Barbara Hackman Franklin, has to say; and see a small sampling of the national media coverage - over one billion impressions to-date - of the Challenge.)
NACD is asking all directors to accept the Challenge by:
- Engaging with NACD's Key Agreed Principles
- Adopting the Principles as a framework
- Assessing current governance practices within the context of the Principles
- Committing to ongoing director education and transparency
Now, more than ever, effective board independence and oversight are the keys to healthy companies and economic growth. We urge you to act now. Click here to learn more - and get started.
Principles
How did the Principles and governance practices come about? In 2008, NACD took the lead and convened directors, the business community and investor groups to create a new framework for strengthening governance. This resulted in the publication of NACD's Key Agreed Principles to Strengthen Corporate Governance for U.S. Publicly Traded Companies. The Principles outline ten areas that directors committed to boardroom excellence should be thinking through and using to tailor their own governance structures and practices to meet the needs of their respective companies. Learn more
Practices
In 2009, NACD again convened thought-leaders from around the nation, this time to focus in at the board practices level. The resulting White Papers Series I: Risk Oversight, Transparency, Strategy and Executive Compensation, provides leading practices developed within the context of the Principles, in the four areas identified as the most critical by the director community. The white papers examine the current environment and summarize NACD’s recommendations. Learn more
The White Papers distill recommendations based on more than 30 years of research findings, leading practices, directors' in-boardroom expertise, current regulatory requirements and annual recommendations of the NACD Blue Ribbon Commissions. Visit our online bookstore or our director education center to learn more.
A Framework for Action
These documents are not meant to prescribe a singular course of action; they point toward a direction—one that only the board, with management, can choose. The time to make that choice is now. This is only the beginning of our national effort encouraging directors to renew commitment to corporate governance and oversight excellence. Working together through NACD, directors will gain the tools, information and peer network they need to enhance effectiveness and restore public confidence in corporate America.
Through America's Challenge for Corporate Directors: Renew Commitment to Corporate Governance and Oversight Excellence, NACD is:
- Providing boards with the principles-based framework they need to evaluate their current practices
- Enabling directors make governance decisions in the context of their own corporate strategy
- Supporting directors with the tools, information and peer network they need to improve effectiveness
- Providing opportunities for greater transparency to shareholders and the public by annually sharing board progress engaging with principles of good governance
NACD will continue this work through a national effort that will identify and advocate leading practices that empower board leadership - and recognize the boards that make the commitment to the Challenge. Visit the News section for regular updates.
NACD is the sole initiator of the America’s Challenge for Corporate Directors Campaign. The endorsement provided by other organizations for the NACD Key Principles document does not necessarily suggest endorsement of the America’s Challenge for Corporate Directors campaign.