Report of the NACD Blue Ribbon Commission on the Governance Committee
The Report on the NACD Blue Ribbon Commission on the Governance Committee: Driving Board Performance, Best Practices and Key Resources provides up-to-date guidance on best practices and takes stances in some controversial areas. Governance committees are at the crossroads of change. The challenge for these committees is to focus on performance, rather than mere compliance. Transcending conformity with governance rules and regulations, the committee can and should become the board’s performance committee, helping directors across their range of responsibilities to continually add value to the board and to the corporation.
The following recommendations are included in the report:
- In order to operate effectively, the governance committee should put forth governance practices that, in addition to conforming to legal or listing requirements, assist the board to provide oversight and support of managements efforts to drive long-tem financial performance and foster an ethical tone throughout the organization
- The governance committee chair should have a well-defined role that augments, but does not compete with, that of the board chair.
- The governance committee should be given authority to shape policy in an effort to bring the best practices of governance to the company and board.
- The governance committee should constantly look to ensure the correct makeup of board members in order to produce the most effective board function.
- The governance committee should seek to achieve optimal governance through evaluation of the board and through continuing director education.