Report of the NACD Blue Ribbon Commission on Strategy Development

This report emphasizes that corporate directors should not limit their engagement in strategy development to annual discussions with management or crises. It recommends that directors recognize that board engagement on strategy is a continual process, and issues related to strategy should be the central focus of board activity year-round.

The Report of the NACD Blue Ribbon Commission on Strategy Development discusses why boards should reassess their approach to strategy and provides a framework for earlier board engagement in the company’s strategy formulation, and tips for changing the rhythm of the board’s dialogue with management on strategy. Additionally, the report addresses what is needed from the board to support continual oversight of strategy development, execution, course correction, and related information and control systems.

The report offers ten recommendations for directors to consider as they recalibrate the traditional dialogue on strategy between the board and management, and deepen their engagement in the strategy process. It also details the potential barriers to changing the conversation on strategy.

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.