NACD - National Association of Corporate Directors
Directorship Magazine January/February 2013 Issue

Table of Contents

January/February 2013

COVER STORY

Honing Skepticism

FEATURES

PROXY SEASON PREVIEW

From Peer Groups to Political Spending

NACD Directorship spoke with Glass Lewis Chief Policy Officer Robert McCormick on what boards and shareholders can expect in the upcoming proxy season.
by Judy Warner

BOARDROOM GUIDE TO EXECUTIVE COMPENSATION

At Issue: What Is Pay?

Standardizing pay definitions so that comparisons between companies can be made could resolve some of the ambiguity.
by Judy Warner

What Are Compensation Committee Members Thinking About?

An in-depth examination of public companies' compensation committee processes.
by Dana R. Hermanson, James G. Tompkins, Rajaram Veliyath, and Zhongxia Ye

ADVISORY COUNCIL

Taking on Proxy Advisors, Shareholders, Diversity and Director Tenure

The third annual meeting of the NACD Nominating/Governance Committee Chair Advisory Council raised concerns about peer groups, director tenure, and board evaluations.
by Cheryl Soltis Martel

THE BRC ON DIVERSITY

Overcoming Obstacles: Building a Diverse Board

NACD Blue Ribbon Commission on The Diverse Board offers suggestions for overcoming challenges in diversifying boards.
by NACD Editors

DEPARTMENTS

President's Letter

A Brave New Word (Yes, Word) for Boards

Directors should focus on creating plans around certain, rather than uncertain, values.
by Kenneth Daly

Editor’s Note

Skepticism as Virtue

A skeptical mindset can be a great starting point for the new year.
by Judy Warner

Chair’s Address

What Directors Need to Do To Restore Trust in Capitalism

Boards should emphasize culture, openness, candor, social responsibility, and continuing education in 2013.
by The Honorable Barbara Hackman Franklin

The Director’s Chair

How to Engage Shareholders When Selecting New Directors

Clarity, respect, and communication were the hallmarks when CalPERS and UnitedHealth Group agreed to collaborate when adding a director to the company’s board.
by Michelle Hooper and Anne Simpson

Need to Know
ADVISORY COUNCIL

Directors Share Views on Key Issues

When the NACD Nominating/Governance Committee Chair Advisory Council recently convened for its third annual meeting, few topics were left off the table. The role of proxy advisory firms, the selection of peer groups, the rise in shareholder engagement, and board composition were top of mind.
by Cheryl Soltis Martel

Keeping Count

Why CEO Interlocks Aren’t the Problem

Interlocks are increasingly not a main motivator of executive compensation packages.
by Kate Iannelli

Washington Update

Will the Center Hold in 2013?

Musical chairs put Congress in middle ground, agencies at edge.
by Alexandra R. Lajoux

Verbatim

Scarce Resource: Corporate Freedom of Speech

Special interest groups are using shareholder disclosure to coerce companies into making policy decisions that may not be in the interests of shareholders.
by Jeffrey M. Cunningham

In Practice

Defining Your Risk Appetite: A Quantitative and Qualitative Approach

Boards and senior management teams must develop risk appetite frameworks to support risk governance, performance management, and major decisions on an ongoing basis.
by Alex Wittenberg

Roundtable
PEER EXCHANGE: COMMUNICATIONS

You Decide: Hero, Villain or Savior?

Reputational risk is a top concern among directors.
by Cheryl Soltis Martel

PEER EXCHANGE: M&A

When Trust Trumps Conflict

Mitigating and circumventing risk in M&A situations is front of mind with many directors.
by Elizabeth Mullen

Entrepreneurial Governance

Trading Volume: The Unsung Small-Cap Enterprise Risk

The more trading value a small-cap stock has, the easier it is to attract investors.
by Adam J. Epstein

Readings

The Sultan of Stat

New York Times FiveThirtyEight Blogger Nate Silver provides a thoughtful analysis of why our predictions about the future are often wrong, and what we can do to improve.
by Jeffrey M. Cunningham

Boardroom Journal

Policy Talks, Money Walks

Activists convinced Apple to shorten Foxconn workers' days, disappointing workers looking to earn higher wages.
by Jeffrey M. Cunningham

Any Lock That Ain’t Locked

Ten lockup agreements in 2012 were allowed to expire early.
by Jeffrey M. Cunningham

DIRECTOR ADVISORY

Audit Committee Roundup

2013 Landscape: An Audit Committee View

Oversight of financial reporting, audit quality, risk management, globalization, government regulation and enforcement top audit committee's concerns.
by Dennis T. Whalen

INTERNATIONAL

Global Cash: Deceivingly Liquid?

Cash might be king, but liquidity is the ultimate sovereign.
by Keith T. Wallace

LITIGATION

Hong Kong: New Companies Ordinance

Hong Kong's new Companies Ordinance represents a significant advancement in governance.
by Carolyn Sng

CEO Succession

Managing Investor Expectations Is Riskier Than You Think

The CEO Transition Study highlights the impact a hastily conceived CEO succession strategy can have on enterprise value.
by Elizabeth Saunders and Bryan Armstrong