Report of the NACD Blue Ribbon Commission on Performance Metrics

Monitoring corporate performance is a vital function of every board. Establishing meaningful metrics — particularly around compensation — may be one of the most challenging tasks directors face. This publication provides helpful advice for creating and monitoring the financial and non-financial metrics that are critical to the success of any enterprise.

This report includes the following Commission recommendations:

• Understand and agree on the company's key performance objectives
• Establish performance metrics to cascade throughout the entire enterprise
• Track company performance against metrics on an ongoing basis
• Establish consistent and appropriate executive performance metrics
• Rate executives based upon performance as measured by appropriate metrics
• Communicate with shareholders regarding how the company has paid for performance