NACD Audit Committee Chair and Risk Oversight Advisory Council: Emerging Trends in Cyber-Risk Oversight

Increasing threats to corporate information systems, critical infrastructure, and intellectual property—as well as compliance risks, liability concerns, and the potential for reputational damage or lost business—continue to make cybersecurity a top priority in the boardroom and the C-suite.

On March 31, 2015, NACD collaborated with KPMG’s Audit Committee Institute (ACI), PwC, and Sidley Austin LLP to co-host the first-ever joint meeting between the NACD Audit Committee Chair Advisory Council and the NACD Advisory Council on Risk Oversight. The session brought together committee chairs from Fortune 500 corporations, technology experts, and governance stakeholders for an open dialogue on the key issues and challenges impacting audit committee and risk committee agendas.

Council delegates joined Charles Beard, a principal in PwC’s forensics practice; Jim Liddy, vice chair of KPMG’s US and head of the firm’s Americas audit practice; and Edward McNicholas, a co-leader of Sidley Austin’s privacy, data-security, and information-law practice to discuss a question now on the minds of many board members: What does good cybersecurity oversight look like?

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.