Boardroom Tools

Investor Expectations of Board Leaders

By NACD Staff


Shareholder Engagement Investor Relations

In brief: Outlined in this tool are some of the top US-based investors and pension funds views on board composition, overboarding, refreshment, and board leadership. Directors and corporate secretaries can use this as a helpful reference guide when seeking guidance on investor’s perspectives of board leadership but should still seek active engagement with the company’s top shareholders.  

Most relevant audiences: lead directors, board chairs, corporate secretaries, nominating and governance committee chairs

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.