Investor Perspectives on Board Diversity

In brief: In recent years, public company boards have increasingly faced shareholder pressure to enhance boardroom diversity. This tool, published as part of the NACD NXT Initiative, provides guidance to boards on what an array of institutional investors, pension funds, and proxy advisory firms have stated about the importance of diversity as a governance imperative.

This resource can help your board

• Initiate boardroom discussions around boardroom diversity

• Become familiar with shareholders’ priorities around board composition

• Identify potential areas of improvement related to board recruitment and diversity

Most relevant audiences: public company directors, nominating and governance committee members, lead directors

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.