NACD - National Association of Corporate Directors
Directorship Magazine May/June 2016 Issue

Table of Contents

May/June 2016

COVER STORY

Liability and Litigation

FEATURES

Investor Perspectives

What Investors Want Now

It's simple, really. Investors want long-term value creation. And a few other things.
by Judy Warner

Shareholder Communications

The Voice of the Retail Investor

When retail investors vote, they can be quite influential. Plan ahead.
by Jesse Rhodes

CEO Succession

For a Smooth CEO Succession, Make Executive Talent Development a Standing Board Priority

Cisco's board invested in talent development, resulting in a smooth transition.
by Cassandra Frangos

Leading Minds of Compensation

How to Keep Executive Pay Balanced and Investors Satisfied

A panel of experts and compensation committee members discuss the nuances of attracting and retaining talent while satisfying shareholder scrutiny.
by Jesse Rhodes

DEPARTMENTS

CEO’s Letter

Stand Strong

NACD CEO Ken Daly ponders the legal weight that directors shoulder during their board service.
by Kenneth Daly

Editor’s Note

Traitors or Heroes?

NACD Directorship Editor in Chief Judy Warner lays out the spectrum of legal issues explored in this issue, and asks readers a big question.
by Judy Warner

The Director’s Chair

An Exploratory Journey

Ana José Varela-Gonzalez recalls her path to directorship, including her time as an Eisenhower Fellow and why she continues to cultivate her sense of curiosity.
by Ana José Varela-Gonzalez

Keeping Count

Public Company Directorships: Are Corporate Directors Over the Limit?

The latest data show that directors err on the side of caution when it comes to board commitments.
by Katherine W. Keally

Washington Update

Companies Seek to Simplify Disclosures While Regulators Seek Comments

SEC Chair Mary Jo White seeks to simplify corporate financial statements, commissioners make Dodd-Frank progress, and Democrats block the long-delayed vote to confirm two new commissioners.
by Judy Warner

Delaware Watch

Your Attendance Is Cordially Required: Decision Expands Ability to Sue Directors in Delaware Courts

Directors and officers must understand that when they agree to serve in that capacity for a Delaware corporation, they also avail themselves of certain duties and protections of Delaware law.
by Francis G.X. Pileggi

NACD Board Leadership Fellow
NACD Fellow Spotlight

Sheila Hooda

Meet NACD Fellow Sheila Hooda, a strategic leader, collaborative director, and engaged learner.
by Jesse Rhodes

In Practice

How Do You Deploy Capital? Have a Plan and Execute

You wouldn’t allow an office building or factory to sit idle, so why let cash?
by Tom Liguori

When Culture is Culprit

The key to any analysis of how corporations stray from good governance is to determine who sets the organization’s culture and how culture is managed.
by Richard Chambers

Perspective

Delivering Mission-Driven Shareholder Value: The PBC Balancing Act

By certifying with B Lab—and having to renew their certification every two years—organizations commit to the rigor of publicly reporting both the successes and failures of their sustainability efforts.
by Alessia Falsarone

Entrepreneurial Governance

David Weild: The Father of the JOBS Act Has a ‘Magic Bullet’ for Small-Caps

Adam J. Epstein spoke with David Weild about the importance of the JOBS Act to the health of American entrepreneurialism.
by Adam J. Epstein

Readings

Accounting for Culture

An NYU professor demystifies the risks of going global.
by Jesse Rhodes

A How-To for Today’s Boardrooms

Peter C. Browning and his business partner, William L. Sparks, have written an excellent how-to book, The Director’s Manual: A Framework for Board Governance.
by Michelle Applebaum

Private Company Insights

Want to Avoid the Spotlight? Focus on Controls

If a startup fails, it should be due to business challenges, not to failure of controls. KPMG's Salvatore Melilli outlines pitfalls to avoid.
by Salvatore Melilli

Small Talk

Rise of the Machines, Dollars and Sense, More

A few conversation starters to leave you with a smile. THIS MONTH: robot charm in the hospitality industry, why women are flocking to businesses that place importance on family values, and more.
by Jesse Rhodes

DIRECTOR ADVISORY

Strategy

Update Your Board’s 2016 Dashboard by Answering These Five Questions

Sure, the global business environment is in flux, perhaps now more than ever; however, that doesn’t mean your board has to be adrift.
by Phyllis Deiso

Compensation

Pay Governance Guidelines for Compensation Committees to Consider

It’s important that compensation committees focus on and, when needed, adapt to a core set of principles to guide compensation decisions.
by Deborah DeHaas and Tara Tays

Audit Committee Roundup

Transparency and Management’s Disclosure Committee

The preparation of required disclosures and the MD&A generally is a complex and time-consuming undertaking, with management’s disclosure committee playing a key role. Consider these suggestions before digging into the work.
by Dennis T. Whalen

Disclosure

How Upcoming Compensation Committee Decisions Will Impact CEO Pay Ratios

Committees may want to think ahead about what the pay ratio story will be.
by Jane Romweber and Dan Kaufman

Financial Strategy

Assessing Your Company’s Capital Allocation Strategy: Share Repurchases and Dividends

Think about the potential impact share repurchases and dividends could have on the company’s ability to create long-term value.
by Paula Loop and Paul DeNicola

Risk Management

Staying Engaged in the Risk Oversight Process

How can the board ensure that the risk oversight process remains effective over time and that it remains engaged with its risk oversight responsibilities?
by Jim DeLoach